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2015 DIGILAW 688 (KAR)

Bapuji House Building Co-operative v. V. C. Reddappa Chetty

2015-06-30

A.V.CHANDRASHEKARA

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ORDER : 1. Heard the learned Counsel for the parties. 2. The order dated 3-10-2013 passed on an application filed under Order 7, Rule 11 of Civil Procedure Code, 1908 by the II Additional Civil Judge (Junior Division), Bangalore Rural District, Bangalore in O.S. No. 526 of 2006 is called in question in the present petition. 3. The petitioner herein is the defendant 4 in the said suit. Respondent 1 herein has chosen to file the said suit O.S. No. 526 of 2006 challenging the attachment of the schedule property made by the Recovery Officer. Respondent 4-Deputy Registrar of Co-operative Societies has passed surcharge award in terms of Section 69 of Karnataka Co-operative Societies Act, 1959 against M. Rudrachar, the deceased defendants 2 and 10 others. The persons against whom surcharge proceedings were initiated were none other than Directors of defendant 4-Bapuji House Building Co-operative Society. Few of them had filed an appeal before the KAT and the same came to be dismissed. Deceased defendant 2-Rudrachar purchased the schedule property on 4-3-1991 through a registered sale deed and handed over the schedule property under the strength of agreement of sale dated 17-8-1994 and GPA was also executed in favour of defendants 4 and 5. They have sold the same in favour of the plaintiff through a registered sale deed. 4. According to the learned Counsel for the plaintiff, said transaction is coupled with interest as per Sections 201 and 202 of Contract Act, 1872. The said schedule property held by Rudrachar was sold to plaintiff on 24-11-2004 and he was put in possession. In between agreement of sale and date of sale deed executed in favour of plaintiff, surcharge proceedings were initiated against the Directors in terms of Section 69 of Karnataka Co-operative Societies Act. The schedule property in question had been attached by the Deputy Registrar of Co-operative Societies and ultimately surcharge proceedings ended in favour of the society and the attachments made before the judgment in the surcharge proceedings came to be confirmed on 27-5-2002. 5. On the basis of the claim of the surcharge proceedings and confirmation of the attachment before the judgment, schedule property was sought to be sold in public auction by the sale officer pursuant to the direction given by the Recovery Officer. 5. On the basis of the claim of the surcharge proceedings and confirmation of the attachment before the judgment, schedule property was sought to be sold in public auction by the sale officer pursuant to the direction given by the Recovery Officer. During the pendency of the said proceedings, plaintiff chose to file objections objecting to the attachment and proposed sale of the property and request has been made to raise the attachment. Ultimately, the sale officer rejected the claim of the plaintiff herein. Therefore, plaintiff has chosen to file the present suit in view of, sub-rule (3) of Rule 41 of Karnataka Co-operative Societies Rules, 1960. 6. The learned Counsel Sri Mahesh Kiran Shetty has argued that the very suit filed is hit by Section 118 of Karnataka Co-operative Societies Act, since the decree sought to be executed by the Sale Officer is pursuant to surcharge proceedings initiated under Section 69 of Karnataka Co-operative Societies Act. It is argued that an appeal lies under Section 105 of Karnataka Co-operative Societies Act and not a civil suit under Order 26 of CPC. With these averments, an application came to be filed under Order 7, Rule 11 (d) of CPC requesting the Court to reject the plaint. It was objected to and application has been dismissed. 7. Plaintiff's vendor had chosen to purchase the schedule property sold through GPA holder. Therefore as argued by G. Krishnamurthy, the said agreement of sale was coupled with interest in terms of Sections 201 and 202 of Contract Act. The said agreement holder and GPA holder of Rudrachar chose to sell the property in favour of the plaintiff on 20-11-2004 through a registered sale deed. In the meantime, property in question was brought to sale by the recovery officer on 28-4-2005 fixing the date of auction as 13-9-2005. Since objections filed by this plaintiff were rejected, plaintiff has chosen to file suit under sub-rule (3) of Rule 41 of Karnataka Co-operative Societies Rules, 1960. Entire Rule 41 of the Karnataka Co-operative Societies Rules, 1960 is relevant and same is extracted herein-below:- "41. Since objections filed by this plaintiff were rejected, plaintiff has chosen to file suit under sub-rule (3) of Rule 41 of Karnataka Co-operative Societies Rules, 1960. Entire Rule 41 of the Karnataka Co-operative Societies Rules, 1960 is relevant and same is extracted herein-below:- "41. Investigation of claims to property attached:- (1) Where any claim is preferred to or any objection is made to the attachment of, any property attached under these rules, on the ground that such property is not liable to such attachment, the Sale Officer shall investigate claim or objection and make an order either rejecting the claim or allowing the claim and to that extent raising the attachment made: Provided that the Sale Officer may refuse to investigate the claim if he considers that the claim or objection is frivolous or made on or after the date fixed for sale. (2) Where the property to which the claim or objection relates has been advertised for sale, the Sale Officer may postpone the sale pending the investigation of the claim or objection. (3) Where a claim or an objection is preferred the party against whom an order is made may institute a suit within six months from the date of the order to establish the right which he claims to the property is dispute, but subject to the result of such suit, if any, the order shall be conclusive." 8. Plaintiff herein has chosen to request the Trial Court to consider the issue relating to maintainability of the suit. Preliminary issue came to be answered in the affirmative and suit was held to be not maintainable and plaint was returned. Anyhow the said matter was taken to this Court by way of CRP No. 621 of 2006 and the same was allowed. The impugned order after returning the plaint was rejected. The Trial Court has observed that the maintainability of the suit under Section 118 of Karnataka Co-operative Societies Act could have been raised at the earliest when maintainability of the suit was urged in terms of the Section 125 of Karnataka Co-operative Societies Act. There appears to be lot of force in the said observation. 9. It is true that plaintiff has chosen to purchase the property after the surcharge proceedings were concluded by the Deputy Registrar of Co-operative Societies. Even prior to that Rudrachar had already purchased the schedule property through a registered sale deed. There appears to be lot of force in the said observation. 9. It is true that plaintiff has chosen to purchase the property after the surcharge proceedings were concluded by the Deputy Registrar of Co-operative Societies. Even prior to that Rudrachar had already purchased the schedule property through a registered sale deed. Being the absolute owner of the schedule property, he chose to sell the same by executing an agreement of sale through an agreement of sale coupled with GPA. This crux of the matter has to be investigated after the full-fledge trial is held. 10. Suffice to state at this stage that suit is maintainable in terms of sub-rule (3) of Rule 41 of Karnataka Co-operative Societies Rules. The said observation is also made by' this Court while disposing of the CRP to that effect in paragraph 9. 11. In this view of the matter there are no merits in the present petition filed under Article 227 of Constitution of India. Accordingly, petition is dismissed. All other contentions raised by the parties in their respective pleadings are kept open. Since the matter is of the year 2006, the learned judge to dispose of the matter as early as possible and the parties and their respective Counsel to co-operate with the learned Judge in early disposal of the matter.