Karnataka High Court
The Malnad Areca Marketing Co Operative ... vs M/S U Basappa & Sons on 10 April, 2019
Bench: Ravi Malimath, S G Pandit
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ON THE 10TH DAY OF APRIL, 2019
BEFORE
THE HON'BLE MR. JUSTICE RAVI MALIMATH
AND
THE HON'BLE MR. JUSTICE S. G. PANDIT
W.A.Nos.6488 OF 2017 AND 6765-6766 OF 2017 (CS-RES)
BETWEEN:
THE MALNAD ARECA MARKETING
CO-OPERATIVE SOCIETY LIMITED
POST BOX NO.13, A P M C YARD
SHIVAMOGGA-577204.
REPRESENTED BY ITS
MANAGING DIRECTOR.
... APPELLANT
(BY SRI.G F HUNASIKATTIMATH, ADVOCATE)
AND:
1. M/S. U BASAPPA & SONS
ARECANUT TRADERS
MARKET ROAD
SAGAR-577401
SHIVAMOGGA DISTRICT.
2. U C SIDDALINGESHWARA
MAJOR
2
SON OF B CHANNAVEERAPPA
PARTNERS: M/S.U BASAPPA AND SONS
ARECANUT TRADERS
MARKET ROAD, SAGAR-577401
SHIVAMOGGA DISTRICT.
3. U C SANGAMESHWARA
MAJOR
SON OF B CHANNAVEERAPPA
PARTNERS:M/S. U BASAPPA AND SONS
ARECANUT TRADERS
MARKET ROAD, SAGAR-577401
SHIVAMOGGA DISTRICT.
4. U C BASAVESHWARA
MAJOR
SON OF B CHANNAVEERAPPA
PARTNERS:M/S.U BASAPPA AND SONS
ARECANUT TRADERS
MARKET ROAD, SAGAR-577401
SHIVAMOGGA DISTRICT.
5. THE ADDITIONAL REGISTRAR OF
CO-OPERATIVE SOCIETIES (C & M)
REGISTRAR OF CO-OPERATIVE SOCIETIES
NO.1, ALI ASKER ROAD
BENGALURU-01.
... RESPONDENTS
(BY SRI.JAYAKUMAR S PATIL, SR.COUNSEL FOR
SRI SUMANTH KUMAR S PATIL, ADVOCATE FOR
RESPONDENT No.1
SRI S.S.MAHENDRA, AGA FOR RESPONDENT No.5
RESPONDENT No.2, 3 AND 4 ARE SERVED AND
UNREPRESENTED)
3
THESE APPEALS ARE FILED UNDER SECTION 4 OF
THE KARNATAKA HIGH COURT ACT PRAYING TO QUASH
THE ORDER DATED 07/10/2017 PASSED IN WRIT
PETITION Nos.2934-2936/2017 [CS-RES] BY THE
LEARNED SINGLE JUDGE OF THIS COURT AND
CONSEQUENTLY AND ETC.
THESE APPEALS COMING ON FOR ADMISSION THIS
DAY, S.G.PANDIT J., DELIVERED THE FOLLOWING:
JUDGMENT
Aggrieved by the impugned order dated 07.10.2017 passed by the learned Single Judge in W.P. Nos.2934 - 2936 of 2017, by which the petitions were allowed, setting aside the order passed by the Karnataka Appellate Tribunal, the second respondent is in appeal.
2. The first petitioner-Partnership Firm consisting of partners i.e., petitioners 2 to 4 approached this court under Articles 226 and 227 of the Constitution of India praying to quash the order dated 27.10.2016 in Appeal 4 No.292 of 2011 passed by the Karnataka Appellate Tribunal, Bengaluru. It is stated that the petitioners are licensed member merchants of the second respondent- society. The petitioners participated in the auction conducted by the second respondent-Society and purchased areca nut at Sagar and Hosanagar Branches of second respondent-Society. The petitioners had purchased areca nut worth Rs.54,73,096/- contained in 750 bags during the period from 11.01.2003 to 01.03.2003. It is the case of the second respondent that the petitioners did not lift the stock within the prescribed period, as such, the second respondent sought permission to re-auction the said 750 bags of areca nut. The market committee issued notice to the petitioners. After hearing the parties, the committee permitted the petitioners to lift 750 bags of areca nut within one month by paying the amount in three installments. It is stated that the Committee examined only the dispute with regard to lifting of areca nut and did not examine the interest to be paid by the petitioners for 5 delay in lifting the auctioned areca nut. Accordingly the petitioners lifted the areca nut on 15.12.2004, 27.12.2004 and 05.10.2005 by paying the entire amount due. It is the case of the petitioners that there is no provision for claiming interest in these type of transactions, and without authority, the second respondent levied interest and adjusted certain amounts towards interest. Therefore, the dispute was raised under Section 70 of the Karnataka Co- Operative Societies Act, 1979 contending that the traders can keep the areca nut purchased in the tender for a period of one month and thereafter, if the traders fail to lift the areca nut, they shall be liable to pay interest and thus claimed Rs.17,31,051/- as interest. The petitioners filed their objections to the dispute and stated that they are not liable to pay any amount towards interest as claimed by the second respondent. The first respondent after considering the material on record, by the order dated 18.02.2011 dismissed the dispute raised by the second respondent claiming interest. Aggrieved by the said 6 dismissal of the dispute, the second respondent filed an appeal before the Karnataka Appellate Tribunal, Bengaluru in Appeal No.292 of 2011. The Appellate Tribunal by order dated 27.10.2016 allowed the appeal and set aside the order passed by the first respondent herein. Aggrieved by the same, the petitioners filed writ petitions assailing the order passed by the Karnataka Appellate Tribunal. The learned Single Judge on hearing the parties allowed the writ petitions setting aside the order of the Karnataka Appellate Tribunal on the ground that there is no provision to collect the interest amount and further was of the opinion that there was no agreement between the parties for payment of interest. The second respondent aggrieved by the order passed by the learned Single Judge is in appeals before this Court.
3. Heard the learned counsel for the appellant-second respondent, learned Senior counsel for the first 7 respondent and learned Government Advocate for Respondent No.5. Perused the appeal papers.
4. There is no dispute with regard to the participation of the petitioners in the auction conducted by the second respondent and they purchased areca nut worth Rs.54,73,096/- contained in 750 bags for the period from 11.01.2003 to 01.03.2003. It is also an admitted fact that the petitioners did not lift the areca nut immediately by paying the price. It is the case of second respondent that since there is delay in lifting the areca nut which the petitioners had purchased in the auction, they are liable to pay interest for the delayed period in excess of one month from the date of auction. The APMC Committee permitted the petitioners to lift the areca nut purchased by them and left the interest part without passing any order. Thereafter, the petitioners lifted the 750 bags of areca nut by paying the entire amount of 54,73,096/- on three different dates. The second respondent claimed interest of 8 Rs,17,31,051/-. The second respondent raised dispute under Section 70 of the 1959 Act. The first respondent on considering the material on record both oral and documentary by order dated 22.08.2011 dismissed the dispute holding that the petitioners are not liable to pay interest on the ground that there is no material to indicate the contract between the parties and the second respondent has failed to show any provision which enables it to charge interest. Aggrieved by the said dismissal of dispute, the second respondent filed an appeal before the Karnataka Appellate Tribunal in Appeal No.292 of 2011. The Appellate Tribunal, by order dated 27.10.2016 allowed the appeal and set aside the order of the first respondent passed in the dispute raised by the second respondent. The Appellate Tribunal, while allowing the appeal relied on the letter of understanding given by the petitioners in the year 1990. The learned Single Judge while allowing the writ petitions has held that the said letter pertains to some other transaction and the petitioners have failed to indicate 9 the nexus between the letter and the transaction in question. The transaction pertains to auction of areca nut held on 11.01.2003 by the second respondent. Whereas the letter relied on by the Karnataka Appellate Tribunal to set aside the order of the first respondent is of the year 1990, which is in no way concerned to the auction conducted in the year 2003. Further, the appellant- respondent No.2 has failed to show any of the provisions, which enables them to claim interest in a transaction like the present one. It is also to be noticed that there is no contract entered into between the petitioners and respondent No.2 which enables either of the parties to claim damages or interest.
5. In the absence of any material or contract or provision to claim interest by the second respondent, when there is delay in lifting the auctioned areca nut, the second respondent is not entitled to claim interest. The order of the learned Single Judge is neither perverse nor erroneous 10 in the facts and circumstances of the case. No ground is made out by the appellant to interfere with the order of the learned Single Judge. There is no merit in the appeal. Hence, the appeal is dismissed being devoid of merits.
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JUDGE JUDGE
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