Kalayarkoil Co-Operative Land Development Bank Limited v. Arumugam
2018-09-25
S.RAMATHILAGAM
body2018
DigiLaw.ai
JUDGMENT S. Ramathilagam, J. The Second Appeal has been preferred against the judgment and decree dated 08.05.2002 passed in A.S.No.45 of 2001 on the file of the Additional District Judge-cum-Chief Judicial Magistrate, Sivaganga, reversing the judgment and decree dated 11.12.2000 passed in O.S.No.165 of 1999 on the file of the Principal District Munsif Court, Sivaganga. 2. The suit in O.S.No.165 of 1999 was filed by the plaintiff to declare the auction sale held on 15.07.1994 as null and void against the defendants and for permanent injunction against the defendants and his men not to encumber the suit property. 3. The brief facts stated by the plaintiff are as follows: 3. (i) The suit property belongs to the plaintiff and the plaintiff obtained a loan from the second defendant by mortgaging the suit property. It is the case of the plaintiff that he was repaying the loan amount. It is his averment that he has not received any notice from the second defendant that he has to pay the entire loan amount, but on 28.05.1994 there was a publication in the "Dinadhandhi" Magazine that the suit property will be auctioned on 22.06.1994 for the first time. Immediately, when the plaintiff approached the second defendant, he was informed that there will not be any auction on that day and only for statistical purpose, the publication was given. As he was informed, there was also no auction conducted on that day. 3. (ii) It is the further case of the plaintiff that already a suit was filed by the plaintiff against the first defendant in O.S.No.461 of 1997 and the suit was decreed in his favour and thus there is an enmity between the plaintiff and the first defendant. Because of the enmity, the first defendant colluded with the second defendant, created documents as though auction was conducted. After coming to know the same, the plaintiff filed writ petition in W.P.No.12160 of 1994 before the Madras High Court and an order was passed with the condition that the plaintiff shall pay a sum of Rs. 17,000/- (Rupees Seventeen Thousand only) to the second defendant. Since the first and second defendants were aware of the order of the High Court, the second defendant refused to receive the amount of Rs. 17,000/- (Rupees Seventeen Thousand only).
17,000/- (Rupees Seventeen Thousand only) to the second defendant. Since the first and second defendants were aware of the order of the High Court, the second defendant refused to receive the amount of Rs. 17,000/- (Rupees Seventeen Thousand only). The second defendant also has not given a publication that the auction was cancelled and further it will be held on 15.07.1994. But the defendants 1 and 2 created documents and the patta for the suit property and they have also transferred it to the first defendant and the first defendant is claiming right over the suit property. The suit filed by the plaintiff in O.S.323 of 1995 was dismissed as the auction is the defective one. It is the averment of the plaintiff that the second defendant had not given a notification as per Section 39 of the Revenue Recovery Act. Without doing so, the right over the suit property was transferred to the auction purchaser. Further, the plaintiff was also not informed for receiving the balance amount from the auction amount. Hence the plaintiff has filed the suit. 4. The first defendant has stated in the written statement that the suit property was brought on auction when the plaintiff has not repaid the loan amount and he took the suit property in the auction for a sum of Rs. 50,000/- and the plaintiff is well aware of the above said facts. Challenging the auction, the plaintiff approached the High Court in W.P.No.12160 of 1994 wherein, this Court directed the plaintiff to deposit a sum of Rs. 17,000/-. However, the plaintiff has not paid the said amount to the second defendant as per the direction of the Hon'ble High Court. Since the order of the High court has not been complied with, the auction was also confirmed in favour of the first defendant, who is the successful bidder and the first defendant was also issued with the sale certificate. The first defendant is in possession of the suit property and the facts are informed to the plaintiff and the first defendant has taken possession of the suit property by paying the revenues and patta has also been transferred in his name. The plaintiff has filed the present suit suppressing the auction proceedings, dismissal of O.S.No.323 of 1995 and dismissal of interlocutory application in I.A.No.1206 of 1995 which attained finality.
The plaintiff has filed the present suit suppressing the auction proceedings, dismissal of O.S.No.323 of 1995 and dismissal of interlocutory application in I.A.No.1206 of 1995 which attained finality. To harass the defendants the present file was preferred and there is no basis for the suit and the suit cannot be filed under Section 156 of Co-operative Societies Act and the suit was filed questioning the auction held in the year 1994, which is not maintainable and therefore, the suit has to be dismissed with costs. 5. The Second defendant, who is the Secretary to Kalayarkoil Co- operative Land Development Bank Limited, has been examined as D.W.2. In his evidence D.W.2 had stated that the plaintiff has mortgaged the property in question and obtained a sum of Rs. 6900/- as loan. As he failed to repay the loan, the property has been brought to public auction, after proper intimation to the plaintiff. Thereafter auction was scheduled to be held on 22.06.1994. However, the same was not conducted on the said date and the same was postponed to 15.07.1994. After prior intimation to the District Collector, the Tahsildar, the Sub Register and also to the plaintiff by means of affixing the notice on the plaintiff's house door and also after Thandora, auction was conducted on 15.07.1994. Four persons were participated in that auction in which the first defendant was declared as successful bidder. Out of the total amount of Rs. 50,000/-, he paid Rs. 30,000/- on the same day and the balance amount of Rs. 20,000/- was paid on 12.08.1994. Before confirming the auction in favour of the first defendant, the High Court has stayed the auction proceedings, directing the plaintiff to deposit Rs. 17,000/- within a period of two weeks from 15.07.1994 i.e. the date of auction. Since the said amount was not paid, the auction was confirmed in favour of the first defendant. There is no illegality or irregularity in the auction proceedings and he prayed for dismissal of the suit. 6. The Trial Court framed four issues, namely; (i) Whether the auction held on 15.07.1994 is genuine and whether it is legally valid one? (ii) whether is the suit is barred by res judicata? (iii) Whether the plaintiff is entitled for the relief claimed in the suit? (iv) to what relief the plaintiff is entitled to?
6. The Trial Court framed four issues, namely; (i) Whether the auction held on 15.07.1994 is genuine and whether it is legally valid one? (ii) whether is the suit is barred by res judicata? (iii) Whether the plaintiff is entitled for the relief claimed in the suit? (iv) to what relief the plaintiff is entitled to? (v) Whether under Section 156 of Co-operative Societies Act the Civil Court jurisdiction is barred? 7. Before the Trial Court, on the side of the plaintiff, two witnesses were examined and Ex.A1 to Ex.A6 were marked. On the side of the defendants, two witnesses were examined and 24 documents were marked. 8. On perusal of the pleadings and documents placed by both sides, the trial Court has dismissed the suit. Against the judgment and decree, the plaintiff preferred First appeal in A.S.No.45 of 2001. The First Appellate Court allowed the appeal setting aside the decree and judgment of the trial Court. Aggrieved by the same, the second defendant/Kalayarkoil Co-operative Land Development Bank filed the present Second Appeal. 9. The Second Appeal is admitted on the following substantial questions of law: (i) Whether the Court below erred in accepting the case of the plaintiff on the basis of the auction sale was conducted without giving proclamation? (ii) Whether the Appellate Court has differentiate the opinion that Section 5 of the Revenue Recovery Act and 156 of Tamil Nadu Co-operative Societies Act? (iii) Whether the proclamation of sale was conducted under Section 126 (g) of the Tamil Nadu Co-operative Societies Act ? and (iv) Whether the successful bidder has paid the auction amount within the period of 15 days as per the provisions of Co-operative Societies Act or within 30 days under the Tamil Nadu Revenue Recovery Act? 10. The learned counsel for the appellant/second defendant/Kalayarkoil Co-operative Land Development Bank would mainly argue that the suit filed against the Co-operative Societies is not maintainable under Civil Procedure Code and the second defendant is in possession of the suit property from the year 1994 and the said fact was not considered by the lower Appellate Court and the proclamation of auction sale was conducted well within the scope of law. 11. Heard the learned counsel for the appellant and the learned counsel for the second respondent and the learned Government Advocate for the third respondent. There is no representation for the first respondent/plaintiff.
11. Heard the learned counsel for the appellant and the learned counsel for the second respondent and the learned Government Advocate for the third respondent. There is no representation for the first respondent/plaintiff. This Court has perused the records regarding the evidence, documents, decree and judgments of the trial Court and the First Appellate Court. 12. Upon hearing the submissions and on perusing the evidence and documents placed by both parties before the Courts below, it is observed that the first defendant is the auction purchaser of the property. The grievance of the plaintiff is that he is not properly served with notice by the second defendant and the publication process was also not adopted by the Co- operative Society in a proper manner and the auction was conducted in a fraudulent manner and also the Co-operative Society colluded with the first defendant and conducted the auction. Hence, he has filed the suit. On the original date of auction, the auction was not held and the postponement of auction to 15.07.1994 was not properly informed by the Society is the grievance of the plaintiff. 13. D.W.2 is the Secretary of the Kalaiyar Kovil Co-operative Society, who has clearly deposed that the procedure and formalities are properly adopted for the recovery of money from the plaintiff and also on failure of the repayment of loan, they have taken appropriate procedure in bringing the suit property for auction. 14. It is seen that notice was served on the plaintiff. The publication and the tom-tom were made in the village, where the suit property is situated and the auction on 15.07.1994 was properly proclaimed and it is also evident that on the day of auction i.e., on 15.07.1994, four persons participated in the auction and the first defendant is the highest bidder for a sum of Rs. 50,000/- and he has paid Rs. 30,000/- on the same day and the order was also marked as Ex.P19. Only after the non-compliance of the conditional order by the plaintiff, the sale in favour of the first defendant was confirmed and the said document was marked as Ex.D.21 and the suit property was also handed over to the first defendant on 09.12.1994. 15.
30,000/- on the same day and the order was also marked as Ex.P19. Only after the non-compliance of the conditional order by the plaintiff, the sale in favour of the first defendant was confirmed and the said document was marked as Ex.D.21 and the suit property was also handed over to the first defendant on 09.12.1994. 15. The relief that the plaintiff sought before the trial Court is one that can be decided by the civil Court or whether the civil Court has no Jurisdiction to decide the same is the question to be decided. 16. It is useful to extract the relevant portion of the judgment of the trial Court, which reads as follows : xxxxxxxxxxx 17. The lower Appellate Court has held as follows: xxxxxxxxxxx 18. "Section 156 of Co-operative Societies Act, 1983 is extracted hereunder: Notwithstanding anything contained in any other law for the time being in force, no order of award passed, decision or actions taken or direction issued under this Act by an arbitrator, a liquidator, the Registrar or an Officer subordinate to them, shall be liable to be called in question in any Court and no injunction shall be granted by any Court in respect of anything which contained or intended to be done by or under this Act." 19. In A.Sarangan and Others Vs. S.Vadivelu Mudaliar (since deceased) and Others, (2009) 3 MLJ 463 , it has been held as follows : "Ratio Decidendi In a suit for declaration and permanent injunction, when the plaintiff claimed right only under the sale deed executed by the Co-operative Society in favour of his vendor who in turn executed the sale deed in favour of the plaintiff and when it is the specific contention of the plaintiff that the Co-operative Society violated its terms and conditions of sale, such a dispute is covered under Section 73 of the Tamil Nadu Co-operative Societies Act and the suit is not maintainable. The only remedy open for the plaintiff is to approach the forum contemplated under the Act." As per the above decision, If the plaintiff felt that it is a fraudulent sale he should have approached the higher authority of the society.
The only remedy open for the plaintiff is to approach the forum contemplated under the Act." As per the above decision, If the plaintiff felt that it is a fraudulent sale he should have approached the higher authority of the society. The other thing that if the Society proceeded according to the Revenue Recovery Act, his remedy is also available within the time frame but he has not taken any steps before the Registrar of the society within 30 days. 20. It is the plaintiff who is argued that the procedure followed by the Society in conducting the auction has not proceeded in a proper way. If any procedure is properly not followed, as per the above decision cited supra, only remedy available to the plaintiff is to seek before the Higher authority of the concerned Society. 21. When it is the admission of the plaintiff that he knows the date of auction and purchase by the defendant Veeranasamy and the transfer of patta and payment of revenues by the defendant Veeranasamy, the plaintiff has not taken any action in time. If at all he is aggrieved with the auction by the Society, he should have sought for relief at the appropriate time and before the concerned higher forum. 22. After considering all these aspects, this Court is of the view that the sale by the Society is proper and the judgment and decree passed by the Additional District Judge-cum-Chief Judicial Magistrate, Sivaganga, in A.S.No.45 of 2002 against the Kalayarkoil Co-operative Land Development Bank is liable to be set aside and the same is hereby set aside. The substantial questions of law are answered accordingly. 23. In fine, (i) the Second Appeal is allowed. No costs. Consequently, connected miscellaneous petition, if any is closed. (ii) the judgment and decree passed by the Additional District Judge- cum-Chief Judicial Magistrate, Sivaganga, in A.S.No.45 of 2002 is set aside. (iii) The judgment and decree passed by the District Munsif Court, Sivagangai in O.S.No.165 of 1999, is confirmed.