Bangalore District Court
) The Karnataka State Judicial vs ) Smt.R.Sumana on 19 April, 2022
KABC010148462010
Govt.of Karnataka TITLE SHEET FOR JUDGMENT IN SUITS
Form No.9(Civil)
Title Sheet for
Judgment in suits
(R.P.91)
IN THE COURT OF THE VI ADDL. CITY CIVIL & SESSIONS JUDGE
AT BENGALURU CITY
(CCCH.11)
Dated this the 19th day of April 2022
PRESENT: Sri. Rama Naik, B.Com., LL.B.,
(Name of the Presiding Judge)
O.S.NO.3886/2010
PLAINTIFFS 1) THE KARNATAKA STATE JUDICIAL
EMPLOYEES HOUSE BUILDING CO-
OPERATIVE SOCIETY LIMITED
No.7/2, 'Surya Chambers'
2nd Floor, 1st Main Road
Seshadripuram, Bengaluru -560 020.
Reptd.by its Secretary
2) THE PRESIDENT
THE KARNATAKA STATE JUDICIAL
EMPLOYEES HOUSE BUILDING CO-
OPERATIVE SOCIETY LIMITED
O.S.NO.3886/2010
2
No.7/2, 'Surya Chambers'
2nd Floor, 1st Main Road
Seshadripuram, Bengaluru -560 020
[By Pleader Smt.B.V.Vidyulatha]
/Vs/
DEFENDANTS 1) SMT.R.SUMANA
W/o.Sri.H.M.Venkatesh
Aged about 40 years
Since dead by LRs -
1(a). SRI.H.M.VENKATESH
Aged about 60 years
R/at No.66, 1st 'B' Main Road
1st Phase, Yelahnaka New Town
Bengaluru - 560 064.
1(B). SRI.NIHAR VENKATESH
Aged about 26 years
R/at No.66, 1st 'B' Main Road
1st Phase, Yelahnaka New Town
Bengaluru - 560 064.
[By Pleader Sri.GL]
2) SRI.C.SHIVALINGAIAH
S/o.Sri.Channe Gowda
Aged about 70 years
R/o No.421, 12th Cross
Sadashivanagar, Bengaluru
[Since deceased deleted vide
Order dtd.21.11.2015]
Date of Institution of the suit : 07.06.2010
O.S.NO.3886/2010
3
Nature of the Suit : Declaration & Injunction
Date of commencement of
recording of evidence : 13.11.2019
Date on which the Judgment
was pronounced : 19.04.2022
Year/s Month/s Day/s
Total Duration : 11 10 12
(RAMA NAIK)
VI ADDL.CITY CIVIL & SESSIONS JUDGE
BENGALURU CITY
JUDGMENT
Suit is filed by Plaintiffs [for brevity 'Society'] for declaring it as the absolute owner of suit schedule property and for declaring the Sale Deed dated 05.01.2002 registered in the name of Defendant No.1 as Document No.BNG(U)- YLNK/7319/2001-02 at the Office of Sub-Registrar at O.S.NO.3886/2010 4 Yelahanka, Bangalore as null and void and same is not binding on it with consequential relief of permanent injunction restraining Defendants No.1 and 2 from interfering with its peaceful possession and enjoyment of suit schedule property.
2) In brief, facts, as stated in plaint, are that Society is registered under the Karnataka Co- Operative Societies Act, 1959. Its incorporation is for the purpose of acquiring the land and to distribute sites formed in the layout to its members.
3) It is stated that Society formed residential layout in the lands bearing various survey numbers of Allalasandra, Chikkabommasandra and Jakkur Plantation villages, and suit schedule property viz., Site No.2099 measuring East to West - 40 feet and North to South - 60 feet is carved out in the said residential layout.
O.S.NO.3886/2010 5
4) It is stated that, as per the provisions of the Karnataka Co-Operative Societies Act, 1959 and Bye-laws of Society, sites carved out in the said residential layout can be allotted to its members only after collecting the costs incurred for the acquisition of the land.
5) It is stated that Defendant No.1 is not a member of the Society and she is not eligible for allotment of site.
6) It is stated that Defendant No.1, having knowledge that she is not eligible for allotment of site, in collusion with Defendant No.2, has got registered Sale Deed dated 05.01.2002 in respect of suit schedule property in her name. There are gross irregularities in registration of the Sale Deed in the name of Defendant No.1. No right, title and interest passed on to Defendant No.1 over suit schedule O.S.NO.3886/2010 6 property and title of suit schedule property remains with the Society.
7) It is stated that entire transaction of execution and registration of Sale Deed in respect of suit schedule property is vitiated by fraud.
8) It is stated that execution and registration of Sale Deed are not preceded by any resolution passed by the Society and hence, the Sale Deed executed in the name of Defendant No.1 by Defendant No.2 is non-est in the eye of law.
9) It is stated that, as the possession of suit schedule property remains with the Society, Sale Deed was never acted upon and therefore, there was no occasion for the Society to get to know about the fraudulent transaction entered into between Defendant No.1 and Defendant No.2.
O.S.NO.3886/2010 7
10) It is stated that, as Defendant No.2 was the President of the Society during the period 1999 and 2005, every care has been taken by Defendants to see that the said collusive transaction of execution of Sale Deed in respect of suit schedule property is not known to the Society.
11) It is stated that the present President of the Society took over the administration of the Society on 23.04.2008. In the context of few other fraudulent transactions in respect of certain other properties belonging to Society, an inquiry was ordered by the Assistant Registrar of Co-Operative Societies, Bangalore, and during the month of February 2009, when papers were being checked regarding all the sites owned by the Society, the fraudulent transaction which took place between Defendants came to the knowledge of the present President of Society. Thereafter, the President of the Society obtained the certified copy of the Sale Deed O.S.NO.3886/2010 8 on 17.04.2010 and after verifying the records, it has come to the knowledge that no consideration has been paid to the Society by Defendant No.2 in respect of the execution of the Sale Deed.
12) It is further stated that the Secretary of the Society issued legal notice dated 31.07.2009 to Defendant No.1, calling upon her to give explanation in getting Sale Deed in her favour and same was not received by her. If the Sale Deed executed in favour of Defendant No.1 is not interfered with, Society will be put to great hardship and injustice. Hence, pray for decree.
13) Defendants No.1 and 2 marked appearance through their respective counsel and filed their written statement.
14) Defendant No.1, in her written statement, states that she is an associate member of the O.S.NO.3886/2010 9 Society and her membership number is 389. She paid sale consideration of Rs.61,598/-. Sale Deed was duly executed by the Society in her name and same was duly registered. After execution of Sale Deed, possession of the suit schedule property was handed over to her by the Society and Sale Deed has been acted upon. She obtained the sanctioned plan from the concerned authority to construct the house, constructed a house in suit schedule property, got electricity connection thereto and has been residing in the house with her family members from 2004.
15) It is stated that as Defendant No.1 is a member of the Society and the matter on hand is a dispute relating to the Society, this Court has no jurisdiction to entertain the suit.
16) It is stated that as Sale Deed was registered way back on 15.01.2002; possession of the suit O.S.NO.3886/2010 10 schedule property was handed over, thereafter house was constructed; and same was occupied in May 2004, the present suit is not maintainable as the same is barred by limitation.
17) It is stated that suit is bad for mis-joinder of the party as Defendant No.2 has no role in the suit. Hence, prays for dismissal of the suit.
18) Defendant No.2, in his written statement, states that the paid Secretary/Executive Secretary and other office bearers of the Society could process the application for allotment of site and receive the amount paid towards allotment of site. After scrutinizing the application and after receipt of of the sale consideration, the Secretary prepare the Sale Deed for and on behalf of the Society and same would be brought before him for his signature. Only after the completion of the formalities by the office of the Society, he would put O.S.NO.3886/2010 11 his signature on the Sale Deed to be registered in favour of the intending purchasers.
19) It is stated that he neither scrutinizes the application, nor processes the allotment, nor receives the sale consideration, and same is being done by the Secretary as per the bye-laws of the Society.
20) It is stated that he has not executed the Sale Deed in favour of Defendant No.1 in his individual capacity or personal capacity. Sale Deed has been executed by the Society itself. He has represented the Society being the President of the Society.
21) It is stated that the Society, for the reasons best known to it, has filed the present suit falsely alleging that there was no occasion for the Society to get to know about the fraudulent transaction entered into between Defendants.
O.S.NO.3886/2010 12
22) It is stated that Society has its Auditor. Society transacts through Directors and other office bearers. He cannot take any independent decision. It is only the Society can take the decision.
23) It is stated that Sale Deed has been executed and got registered by the Society in favour of Defendant No.1 and therefore, it cannot claim that it had no knowledge of the execution of the Sale Deed executed in favour of Defendant No.1 by the Society.
24) It is stated that Society used to get the accounts audited including the allotment of sites, execution of the Sale Deeds and receiving of the sale considerations every year, and therefore, Society cannot aver its ignorance of the Sale Deed executed in favour of Defendant No.1. Hence, prays for dismissal of the suit.
O.S.NO.3886/2010 13
25) Issues and Additional Issues that have been framed by this Court are as under :
1) Whether the Plaintiff's prove that they are the absolute owners of the suit schedule property?
2) Whether the Plaintiff's proves that the sale deed dated 05.01.2002 executed by 2nd Defendant in favour of 1 st defendant is a fraudulent, fabricated & collusive as such it is a null & void document?
3) Whether the Plaintiff's prove that they are in lawful possession & enjoyment of the suit schedule property as on the date of suit?
4) Whether the Plaintiff's prove the alleged interference?
5) Whether the suit is barred by law of limitation?
6) Whether the Plaintiff's are
entitled for the relief's
claimed?
7) What decree or order?
ADDL.ISSUES FRAMED ON 22.02.2014
1) Whether the Plaintiff proves that the 1st defendant is not a member of Plaintiff society and as such 1st defendant is not eligible for allotment of site O.S.NO.3886/2010 14 belonging to plaintiff society as stated in para 6 of the plaint?
2) Whether the 2nd defendant proves that the suit is bad for non-joinder of necessary parties?
26) Society has got examined its Secretary as PW.1 and Exs.P.1 to P.6 and P.6(a) have been marked in support of its case. Defendant No.1(a) has got examined as DW.1 and got marked Exs.D.1 to D.34 on behalf Defendant.
27) Heard learned counsel for Plaintiffs, as well as Defendant No.1. Perused the written argument filed by Defendant No.1 and the records.
28) My findings to above Issues and additional Issues are as under :
Issue No.1 - In Negative Issue No.2 - In Negative Issue No.3 - In Negative O.S.NO.3886/2010 15 Issue No.4 - In Negative Issue No.5 - In Affirmative Issue No.6 - In Negative Additional Issue No.1 - In Negative Additional Issue No.2 - Does not survive Issue No.7 - As per final Order, for the following :
REASONS
29) Issues No.1 to 4 and Additional Issue No.1 : These issues being interrelated are taken together for discussion.
Suit is for declaring the Society as absolute owner of suit schedule property and for declaring the registered Sale Deed dated 05.01.2002 executed in favour of Defendant No.1 as null and void and same is not binding on the Society and for permanent injunction restraining Defendants No.1 O.S.NO.3886/2010 16 and 2 from interfering with peaceful possession and enjoyment of suit schedule property by the Society.
30) Ex.P.2, Sale Deed dated 05.01.2002, goes to show that Sale Deed was executed by Defendant No.2 representing the Society in favour of Defendant No.1 and same was registered in the office of Senior Sub-Registrar, Yelahanka, Bangalore vide Document No.BNG(U)-YLNK/7319/2001-02. 30.1) Sale Deed is sought to be declared as null and void and same is not binding on the Society. In fact, Society executed the Sale Deed in favour of Defendant No.1. In the Sale Deed, Defendant No.2, who was the then President of the Society, represented the Society. Thus, Society is a party to the Sale Deed.
O.S.NO.3886/2010 17 30.2) Chapter-V of the Specific Relief Act, 1963 deals with 'Cancellation of Instruments'. Section 31 reads as under :
"31. When cancellation may be ordered - (1) Any person against whom a written instrument is void or voidable; and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, in its discretion, so adjudge it and order it to be delivered up and cancelled." 30.3) As envisaged in Section 31, the Society ought to have sought for cancellation of the Sale Deed instead of seeking declaration that the Sale Deed be declared as null and void and same is not binding on the Society.
30.4) In Guru Prasad and Others vs. S.A.Rudraradhya and Others, [WP No.13120/2008 connected with WP Nos.13121 and 13123/2008 (GM-CPC), decided on 01.04.2010], the Hon'ble High Court of Karnataka, in para-7, was pleased to hold thus :
O.S.NO.3886/2010 18 "7. ... However, the suits clearly indicate that the plaintiffs are seeking declaration that the sale deed executed by their alleged Powers of Attorney is not binding on them. The nomenclature or nature may be different. The effect of such declaration amounts to cancellation of sale deed as against the plaintiffs are concerned. In my opinion, the relief sought for by the plaintiffs clearly falls under Section 38 of the Act, as the plaintiffs themselves want to get rid of the sale deed and Powers of Attorney....."
30.5) It may be noticed that Society pays court-fee under Section 38 of the Karnataka Court-
Fees and Suits Valuation Act, 1958 [KCF & SV Act]. Section 38 of KCF & SV Act deals with suits for cancellation of decrees or other document. Thus, it can be conveniently said that though Society seeks declaration that Sale Deed executed in favour of Defendant No.1 be declared as null and void and same is not binding on it, in fact, it seeks cancellation of the Sale Deed as envisaged in Section 31 of the Specific Relief Act, 1963 by paying court-fee under Section 38 of the KCF & SV Act, which deals with cancellation of decrees and other O.S.NO.3886/2010 19 document. In that view, there is no impediment to entertain the suit filed by the Society.
31) Society has challenged the Sale Deed dated 05.01.2002 executed by it in favour of Defendant No.1 on the ground that Defendant No.1, in collusion with Defendant No.2, seems to have got registered Sale Deed in respect of suit schedule property. It is contended that there are gross irregularities in execution of Sale Deed and therefore, no right, title and interest have been conveyed in favour of Defendant No.1 under Sale Deed.
31.1) It is the contention of the Society that Defendant No.1 is not a member of the Society and that execution and registration of the Sale Deed are not preceded by any resolution passed by the Society.
O.S.NO.3886/2010 20 31.2) On the contrary, Defendant No.1 contends that she is an associate member of the Society. Her membership number is 389. After payment of sale consideration, Sale Deed was duly executed by Defendant No.2 representing the Society in her favour. She was put in possession of suit schedule property. As per Sale Deed, khatha of suit schedule property was entered in her name. She got sanctioned plan from the concerned authority and constructed a house in suit schedule property, electricity connection was takn and she has been residing therein with her family members by paying property tax to BBMP.
31.3) Defendant No.2, in his written statement, contends that it is the Society, which executed Sale Deed in favour of Defendant No.1. He was authorized to execute the Sale Deed in favour of Defendant No.1. He only represented the Society being the President of the Society. He never O.S.NO.3886/2010 21 executed Sale Deed in his individual or personal capacity.
31.4) It is contended that, as per the bye- laws of the Society, the Secretary and other office bearers process the application for allotment and receive the amount paid towards allotment of site. After scrutinizing the application received for allotment of site and after receipt of the sale consideration paid to the Secretary, they prepare Sale Deed to be executed in favour of the allottee. Only after completion of formalities by the office, document would be brought before him for signature on the Sale Deed to be executed in favour of the intending purchaser.
31.5) It is also contended that Society has its own auditor. All the proceedings of the Society are taken place through Directors and office bearers. He has done nothing except the decision of the Society.
O.S.NO.3886/2010 22 Merely because he signed the document on behalf of the Society, he cannot be held responsible. 31.6) In the backdrop of the contention taken in written statement of Defendant No.2, it is necessary to have regard to the bye-laws of the Society.
31.7) Rule-52 of the Bye-laws at Ex.P.5 deals with duties of the Secretary. It reads as under :
"52. DUTIES OF THE SECRETARY : -
To summon all the meetings of the General Body and the Board.
(b) To record proceedings of such meetings in the minutes book.
(c) To call for first meeting of the newly constituted committee.
(e) To maintain account books, registers and other records, unless otherwise decided by the committee.
(f) To produce records of the society before different authorities concerned with the working of the Society.
O.S.NO.3886/2010 23
(g) To sign all the documents for and on behalf of the Society.
(h) To receive the application for membership, for withdrawal of deposits, and shares etc., and place the same before the Board.
To place before the Board of directors all documents relating to the loan applications from members, all vouchers and receipts pertaining to the receipts and payments statements.
Subject to such rules as may be framed from time to time or any resolution in that behalf, the secretary is empowered to sign all papers to transact business on behalf of the society, to acquire, draw interest or endorse all Government and other remittances, debentures, or shares and to represent the society in all litigations relating to the society. He shall be responsible for the the safe custody of the registers and all other records of the society inclusive of cash, stock and other properties of the society. The overall responsibilities of all financial transactions lies on the secretary." 31.8) Chapter-VI of the Bye-laws deals with MISCELLANEOUS PROVISIONS. It reads as under :
" (1) Register of members. (2) Share Register (3) Nomination Register (4) O.S.NO.3886/2010 24 Receipt book. (5) Voucher book. (6) Cash book .(7) General Ledger. (8) Site deposit ledger. (9) Register of allotment of sites. (10) Property Register. (11) Investment Register. (12) Loan Register. (13) Mortgage Register (14) Register of furniture, fixtures and other equipments. (15) Register of Library. (16) Minutes book of the General Body meeting. (17) Minutes book of the Board of directors meeting. (18) Audit rectification register.
DOCUMENTS : The society shall maintain the following documents. (1) Application for members. (2) Letter of resignation of members (3) Application for transfer of shares/interest on the capital. (4) correspondence with the Registering Authority.
(5) Conveyance of property. (6) Agreement and contract deeds. (7) Application for sites with all connected activities.
(8) Approved plans of layout. (9) Copy of the registered bye-law with upto date amendments.
(10) certificate of Registration. (11) Memberwise loan application, sanction and documentations. (12) Periodical statements (13) Audit memos and audit reports (14) Notice and agenda of committee of management.
(15) Notice and agenda of General Body meeting.
(16) Copies of the K.C.S. Act and K.C.S. Rules.
(17) File containing the circulars/directions issued by Registrar/Director of Audit or any other authority connected with the society. "
O.S.NO.3886/2010 25 31.9) A plain reading of the above rules incorporated in the Bye-laws makes it clear that no work has been assigned to the President in the Bye- laws specifically. All that duties is cast on the Secretary, who is the chief Executive Officer of the Society under the Bye-laws.
31.10) Contention taken by Defendant No.2 in his written statement that all the affairs of the Society are being done by the Secretary, is supported by the rules laid down in the Bye-laws of the Society.
31.11) Plaintiff's contention is that Defendant No.1, in collusion with Defendant No.2 seems to have got registered Sale Deed. Except the bare statement in plaint, no particulars as to alleged fraud have been exemplified by the Society as mandated under Order VI Rule 4 of CPC.
O.S.NO.3886/2010 26 31.12) Order VI Rule 4 of CPC deals with particulars to be given where necessary. It reads thus :
"4. Particulars to be given where necessary.- In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with dates and items if necessary) shall be stated in the pleading."
31.13) Section 17 of the Indian Contract Act, 1872 defines 'fraud'. It is extracted as under :
"17. 'Fraud defined'.- 'Fraud means and includes any of the following acts committed by a party to a contract, or with his connivance , or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into contract:
(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent."
O.S.NO.3886/2010 27 31.14) Thus, false assertion, active concealment, promise without intention of performing it, any other deceptive act, or any act declared as fraudulent would constitute 'fraud'. 31.15) Plaint does not give any particulars of fraud and manner of committing fraud as envisaged in Section 17 of the Contract Act, 1872. 31.16) Sale Deed at Ex.P.2 goes to show that it has been executed by the Society. In the Sale Deed, Defendant No.2, being the President of the Society, represented the Society. He has not executed the Sale Deed in his personal or individual capacity. 31.17) It has been pleaded in the plaint that Defendant No.2 was the President of the Society during the period 1999 and 2005. Sale Deed at Ex.P.2 was executed in favour of Defendant No.1 on 05.01.2002. This makes it clear that, at the time of O.S.NO.3886/2010 28 execution of the Sale Deed in favour of Defendant No.1, Defendant No.2 was the President of the Society. In that eventuality, whatever the acts that were done by Defendant No.2 on behalf of the Society are binding on the Society. 31.18) In order to constitute fraud, either Society shall have played fraud on Defendant No.1 or Defendant No.1 shall have played fraud on the Society as envisaged in Section 17 of the Contract Act, 1872. In the present case, Society is trying to draw a line between President and the Society and to project the President as independent of the Society by contending that Defendant No.1, in collusion with Defendant No.2, has obtained Sale Deed.
31.19) If it is hypothetically assumed that Defendant No.2 committed fraud on the Society, the commission of fraud cannot be attributable to Defendant No.1 unless the involvement of O.S.NO.3886/2010 29 Defendant No.1 is established. In the present suit, there are no materials before the Court to say that Defendant No.1 played fraud upon the Society. Similarly, to say that Defendant No.2 committed fraud on the Society, no materials have been placed by the Society. On the contrary, PW.1 has deposed that no criminal action has been taken by the Society against the President for execution of Sale Deed by the President and that no resolution has been passed to the said effect.
31.20) Moreover, nothing has been elicited in the cross examination of DW.1 that Defendant has played fraud upon the Society in securing the Sale Deed. Only suggestions put to DW1 are that no application was filed by Defendant No.1 for membership, that membership fee was not paid, that Defendant was not the member of the Society and that no sale consideration mentioned in Sale Deed was paid to the Society. Thus, it is clear that O.S.NO.3886/2010 30 there are no material particulars in the pleadings regarding the alleged fraud; no oral evidence has been adduced stating the particulars and manner of committing the alleged fraud; and even there is no cross examination to DW.1 regarding the alleged fraud.
31.21) Defendant No.1 has produced the documents, which were secured by Defendant from Bangalore Development Authority [BDA] under Right to Information Act, 2005 and same is marked as Ex.D.1.
31.22) Ex.D.1 goes to show that, as per the order dated 06.01.2006 passed in W.P.No.40994/2002 passed by the Hon'ble High Court of Karnataka, a joint survey was conducted on 04.02.2006 by BDA and 404 sites formed by the Society in the Judicial Layout were identified. Ex.D.1 details the sites vacant or built-up. In Sl.No.29, Site O.S.NO.3886/2010 31 No.2099 [suit schedule property] is mentioned as 'Built up (GF)' and same has been marked as Ex.D.1(a). It makes it clear that, at the time of conducting joint survey, there exists construction in suit schedule property.
31.23) Ex.D.2 is letter dated 30.11.2007 addressed by the Society to Sub-Registrar, Yelahanka, Bangalore requesting to furnish sites number, the names of the owners of the sites and their address in order to enable the Society to furnish the same before the Hon'ble High Court of Karnataka. List attached to Ex.D.2 goes to show that, in Sl.No.29, Site No.2099 measuring 40 x 60 is shown in the name of Defendant No.1 and same has been marked as Ex.D.2(a).
31.24) Ex.D.4 is Possession Certificate dated 06.02.2002 issued by the Society in favour of Defendant No.1. It mentions the membership O.S.NO.3886/2010 32 number of Defendant as 389. Site number is shown as 2099 measuring 40' x 60', which is suit schedule property, along with its boundaries. Registration number and date of registration of Sale Deed have also been mentioned in Ex.D.4.
31.25) Ex.D.5 is House Tax Assessment Register, which stands in the name of Defendant No.1 and Ex.D.6 is letter issued by City Municipal Council, Yelahanka for having changed the khatha in the name of Defendant No.1.
31.26) Ex.D.7 is license dated 16.02.2004 issued by the City Municipal Council, Yelahanka for construction of the house and Ex.D.8 is sanctioned plan for construction of the house issued by the Assistant Executive Engineer, City Municipal Council, Yelahanka.
O.S.NO.3886/2010 33 31.27) Ex.D.9 is receipt for having paid the license fee and fees for approved plan. Exs.10 to D.15 are tax paid receipts.
31.28) Ex.D.16 is Test Certificate dated 05.12.2003 issued by the Assistant Executive Engineer, BESCOM. It goes to show that electricity facility has been provided to the house constructed by Defendant No.1.
31.29) Ex.D.17 is Invoice dated 09.12.2003 for having purchased Electro meter by Defendant No.1. Ex.D.18 is letter issued by BESCOM for having approved the electricity facility to the house constructed by Defendant No.1. Ex.D.19 is Telephone Registration Card.
31.30) Ex.D.20 is Sanction Letter dated 11.03.2004 issued by Syndicate Bank and it O.S.NO.3886/2010 34 discloses that Defendant No.1 availed a loan of Rs.4.5 lakhs from the bank.
31.31) Ex.D.21 is Invitation Card. It goes to show that 'Gruha Pravesham' of the house was made on 21.05.2004. Ex.D.22 is Insurance Policy for assured sum of Rs.9,00,000/- made in respect of the house against the risk of fire and shock. 31.32) Ex.D.23 is Certificate dated 29.11.2012 issued by BBMP for having changed the khata in BBMP records in the name of Defendant No.1(b). Ex.D.24 is Suvarna Khata Certificate issued by BBMP. Ex.D.25 is House Tax Assessment Register issued by BBMP. Exs.D.26 to D.31 are property tax receipts issued by BBMP. Exs.D.32 and D.33 are photos of the house. Ex.D.34 is CD. 31.33) From the above documents, it is clear that, in pursuance of the Sale Deed executed in O.S.NO.3886/2010 35 favour of Defendant No.1, she is in lawful possession and enjoyment of the suit schedule property.
31.34) It is to be noticed that Society does not dispute the Possession Certificate issued by the Society after registration of Sale Deed and it does not contend that said document has been obtained by Defendant No.1 by playing fraud upon the Society.
31.35) In Patel Tippeswamy vs. Smt. Gangamma and Others, [2002(3) Kar.L.J. 512B], the Hon'ble High Court of Karnataka was pleased to hold that a party pleading fraud and misrepresentation in respect of a transaction must give material particulars of allegations, and in absence of such particulars, his plea is to be rejected.
O.S.NO.3886/2010 36 31.36) In Ranganayakamma and Another vs K.S.Prakash (deceased) by L.Rs and Others, 2006(3) Kar.L.J. 177A (DB)], the Hon'ble High Court of Karnataka was pleased to hold that general allegations without particulars are not sufficient.
31.37) In Mariyappa K.S. vs. Siddalinga Shetty, 1989(1) Kar.L.J. 150 (DB)], the Hon'ble High Court of Karnataka was pleased to hold that absence of material particulars regarding fraud and collusion, it is not possible to hold that plaint contains necessary averments as to fraud and collusion.
31.38) Society has placed reliance on the judgment of the Hon'ble Supreme Court in the case of S.P.Chengalvaraya Naidu (Dead) vs. Jagannath (Dead) by L.Rs., [AIR 1994 SC 853], wherein the Hon'ble Supreme Court was pleased to O.S.NO.3886/2010 37 hold that judgment or decree obtained by playing fraud on the court is a nullity.
31.39) It is true that 'fraud' vitiates all solemn transactions. However, before holding that fraud is committed, the same shall be proved by giving material particulars and by placing cogent evidence. In absence of proving the alleged fact of fraud, it cannot be said that fraud is committed. Assertion in plaint that Defendant No.1, in collusion with Defendant No.2, has obtained the Sale Deed in her favour is a mere assertion, on the basis of which, no inference can be drawn that fraud has been committed in obtaining the Sale Deed by Defendant No.1 in absence of proving the said fact.
32) It is the contention of the Society that Defendant No.1 is not the member of the Society and she is not eligible for allotment of the site.
O.S.NO.3886/2010 38 32.1) It is to be noticed that Society executed Sale Deed in favour of Defendant No.1 mentioning the membership number as 389. After execution of the Sale Deed, she was issued with Possession Certificate mentioning the membership number as
389. In that circumstance, presumption would naturally arise that since Defendant No.1 is the member of the Society, Sale Deed was executed in her favour and she was issued with Possession Certificate. In that eventuality, burden lies upon the Society to prove that Defendant No.1 was not the member of the Society.
32.2) Society's contention is that membership number mentioned in Sale Deed belongs to one Smt.G.N.Kalavathi and same does not belong to Defendant No.1. Society has produced Membership Register No.389 at Ex.P.6 and P.6(a). In Ex.P.6, membership number 389 is shown in the name of one G.N.Kalavathi. Society can explain the O.S.NO.3886/2010 39 said anomaly in membership number because both documents have been prepared by the Society itself. Moreover, it is not at all the case of the Society that suit schedule property has been registered in the name of G.N.Kalavathi by mentioning the membership number as 389. Had there been such document, the same would have been produced. However, no such document has been produced. Be that as it may, Sale Deed has been executed in favour of Defendant No.1 by mentioning the membership number as 389 and subsequently, possession certificate has been issued in her favour by mentioning the same membership number. Merely because membership register at Ex.P.6 reflects the name of the person other than Defendant No.1, it cannot be said that Defendant No.1 has played fraud upon the Society. As Exs.P.2, P.6 and D.4 have been prepared by the Society, no role in preparing the said documents O.S.NO.3886/2010 40 can be attributed to Defendant No.1 in absence of cogent evidence.
33) It is the further contention of the Society that no resolution was passed by the Board of the Society authorizing Defendant No.2 to execute the Sale Deed in favour of Defendant No.1 and that no sale consideration was paid by Defendant No.1. 33.1) It is important to note that it is the Society and Society only can say that whether resolution was actually passed or not to execute the Sale Deed in favour of Defendant No.1 and other than the Society, no one can say about the affairs of the Society.
33.2) Bye-laws requires that all the books and documents shall be maintained by the Secretary, who is the Chief Executive Officer of the Society as provided in Bye-laws.
O.S.NO.3886/2010 41 33.3) Sale Deed at Ex.P.2 specifically recites that Vendee being one such member applicant has been allotted a Site No.2099 in 40 feet x 60 feet dimension at the layout, for a consideration amount of Rs.61,598/- and the Vendee has paid the said amount from time to time which Vendor Society hereby acknowledges, subject to the conditions that the additional charges towards establishment of amenities and other funds created. 33.4) Sale Deed further recites that in consideration of sum of Rs.61,598/- paid to the vendor Society, the vendor Society conveys and transfers to the vendee, the Site No.2099 more fully and specifically described in the schedule annexed thereto and she is put in possession of the property as full owner.
33.5) It may be noticed that Society has not produced nomination register; receipt book;
O.S.NO.3886/2010 42 voucher; cash book; general ledger; site deposit ledger; register of allotment of sites; property register; minutes of book of the General Body meetings; minutes of book of the Board of Directors meeting; and audit rectification register. These documents are required to be maintained by the Secretary as contemplated in Bye-laws. 33.6) Had the Society produced such documents and had they disclosed that Defendant No.1 is not the member of the Society and that she had not paid the consideration amount and that no resolution was passed to execute the Sale Deed, then it would be relevant to say that Defendant No.1 is not the member of the Society and that she has not paid the consideration amount and that Sale Deed has been executed by Defendant No.2 in favour of Defendant No.1 without there being passing of resolution.
O.S.NO.3886/2010 43 33.7) On the contrary, Ex.D.2, letter of the Society accompanying with list of names and addresses of the allottees, makes it clear that, in Sl.No.29 [Ex.D.2(a)], the name of Defendant No.1 has been shown as allottee of Site No.2099, which is the suit schedule property.
33.8) That being the case, no occasion has arisen to say that Defendant No.1 is not the member of the Society and that no consideration was paid to the Society and that the Sale Deed was executed by Defendant No.2 without there being any resolution. When the Society challenges the Sale Deed executed in favour of Defendant No.1 by Defendant No.2 on the ground of fraud, it is its bounden duty to produce all such documents. On the contrary, all such documents have been withheld by the Society.
O.S.NO.3886/2010 44 33.9) Section 114(f) and (g) of the Indian Evidence Act, 1872 specifically state that the Court may presume that the common course of business has been followed in particular cases and that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it.
33.10) In absence of production of such documents, presumption would naturally arise that common course of business has been followed in the case of Defendant No.1 and in that view, it can be fairly said that if said documents were produced by the Society, the same would be unfavourable to the Society. In that view, there is no reason to accept the Society's contention that no resolution was passed by the Society for execution of the Sale Deed by Defendant No.2 in favour of Defendant No.1 and that no consideration was paid to the Society.
O.S.NO.3886/2010 45
34) Society contends that there have been gross irregularities in execution and registration of the Sale Deed in favour of Defendant No.1. It is nowhere mentioned in plaint, as well as evidence of PW.1 that what are the irregularities that were taken place in execution of Sale Deed. Be that as it may. Irregularities cannot be used interchangeably for fraud. In fact, irregularities mean irregularities and same cannot be termed as fraud. Even assuming that there has been irregularity in execution and registration of the Sale Deed in favour of Defendant No.1, same would be attributable to Society and same does not vitiate the Sale Deed validly executed by the Society in favour of Defendant No.1, unless it is shown that such irregularity would go to the root of the matter.
35) It is to be noticed that Bye-law No. 53 makes it clear that the Society shall allot sites/flats/houses only to members who are eligible as per bye-law O.S.NO.3886/2010 46 No.10. Bye-law No.10 deals with rights of members. It states that the member does not already own a site or plot or house. A plain reading of Bye-laws, it would make it clear that there is no specific bar in the Bye-laws to allot the sites to non-members. Be that as it may.
35.1) In Binny Mill Labour Welfare House vs. D.R.Mruthyunjaya Aradhya, [ILR 2008 Kar 2245], the Hon'ble High Court of Karnataka was pleased to hold thus :
"36. It is true under the aforesaid bye-law the sale deed on behalf of the society is to be executed by the President, the Secretary, and three other Directors. In the instant case it is executed only by the President, Secretary and Treasurer, who is one of the Director and two other Directors have not executed the said sale deed. The question is whether it renders the sale void. In this regard it is useful to refer to a judgment of the Supreme court in the case of Co-Operative Central Bank Ltd. And Ors. V. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad and Ors. Wherein it has been held as under :
The bye-laws of a co-operative society framed in pursuance of the provisions of the Act cannot be held to be law or to have the force of law. It has no doubt been held O.S.NO.3886/2010 47 that, if a statute gives power to a Government or other authority to make rules, the rules so framed have the force of Statute and are to be deemed to be incorporated as a part of the statute. That principle, however, does not apply to bye- law of the nature that a co-operative society is empowered by the Act to make. The bye-laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a society. They are plaintiff the nature of the Articles of Association of a company incorporated under the Companies Act. They may be binding between the persons affected by them, but they do not have the force of a statute.
37. In view of the aforesaid authoritative pronouncement of the Supreme court the said bye-law cannot be equated to law, rules or regulations. The said bye-laws only govern the internal management, business or administration of a society. They are in the nature of Articles of Association of a Company incorporated under the Companies Act. It has no statutory force. Any act of the society contrary to the said bye-law ipso facto do not render the said act void and without authority. When the society enters into a contract with third parties or outsiders those outsiders are in no way bound by the said bye-law. The society is a body corporate by name having a perpetual succession and a common seal and when a contract is entered into by the office bearers of the society i.e., the President, the Secretary and the Treasurer on behalf of the society with the third parties, it is binding on the society even though it is contrary to the bye-law. In fact on that ground till today no steps are taken by the society to get the said deed annulled. On the contrary, O.S.NO.3886/2010 48 the society has executed the cancellation deed."
36) Sale Deed recites that vendee acknowledges the possession of the suit schedule property. Apart from that, documents produced by Defendant No.1 make it clear that, for having delivered the suit schedule property to Defendant No.1, Possession Certificate at Ex.D.4 has been issued to Defendant No.1. Accordingly, the khatha of suit schedule property has been entered in the name of Defendant No.1 in BBMP. License was obtained and plan got sanctioned for construction of the house. House was constructed and opening ceremony of the house was made on 21.05.2004. Basic amenities like electricity connection, telephone facility were provided with. property tax to BBMP is paid.
36.1) Having considered the above aspects of the matter, it can be fairly said that Society is not in O.S.NO.3886/2010 49 lawful possession and enjoyment of the suit schedule property as on the date of the suit. On the contrary, Defendant No.1 is in lawful possession and enjoyment of suit schedule property. Hence, the alleged interference by Defendant No.1 is make believe. In that view, I answer the above Issues accordingly.
37) Issue No.5 : Society's contention is that cause of action for the suit arose during February 2009, when the present President of the Society got the knowledge about execution and registration of the fraudulent, fabricated and collusive Sale Deed registered in the name of Defendant No.1. 37.1) Article 59 of the Limitation Act, 1963 states as follows :
Description of suit Period of Time from which limitation period begins to run
59. To cancel or set Three Years When the facts entitling aside an instrument the Plaintiff to have the or decree or for the instrument or decree O.S.NO.3886/2010 50 rescission of a cancelled or set aside contract or the contract rescinded first become known to him.
37.2) Society seeks the declaration of the Sale Deed as null and void on the ground of fraud. It is to be noticed that no such alleged fraud allegedly committed by Defendants has been proved by the Society in the instant suit. Hence, fact of alleged fraud as contended by the Society cannot be availed of to the Society as knowledge of execution of Sale Deed.
37.3) Sale Deed at Ex.P.2 makes it abundantly clear that Society has registered the Sale Deed in favour of Defendant No.1 through its President, Defendant No.2 and same has been got registered in the Office of Senior Sub-Registrar, Yelahanka, Bangalore vide Document No.BNG(U)-
YLNK/7319/2001-02.
O.S.NO.3886/2010 51 37.4) Section 3 of the Transfer of Property Act, 1882 deals with the word "Notice". It states : "A person is said to have notice" of a fact when he actually knows that fact, or when, but for wilful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it."
37.5) Explanation-I says that where any transaction relating to immovable property is required by law to be and has been effected by a registered instrument, any person acquiring such property shall be deemed to have notice of such instrument as from the date of registration. 37.6) Explanation-II says that any person acquiring any immovable property shall be deemed to have notice of the title, if any, of any person who is for the time being in its actual possession.
O.S.NO.3886/2010 52 37.7) Explanation-III says that a person shall be deemed to have had notice of any fact if his agent acquires notice thereof while acting on his behalf in the course of business to which that fact is material.
37.8) Proviso to Explanation-III says that if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.
37.9) Section 229 of the Indian Contract Act, 1872 provides that any notice given to or information obtained by the agent, provided it be given or obtained in the course of the business transacted by him for the principal, has the same legal consequence as if it had been given to or obtained by the principal.
O.S.NO.3886/2010 53 37.10) Thus, it would be clear that registration of a document is notice of all the facts stated in that document. Actual possession of the immovable property operates as constructive notice of the title to property. Notice to agent amounts to notice to principal.
37.11) In the present suit, Sale Deed was executed on 05.01.2002. Possession certificate was issued on 06.02.2002. Society does not dispute the Possession Certificate issued by it to Defendant No.1. Its only plea is that Sale Deed has been obtained by fraud. It has failed to prove the alleged plea of fraud. In that circumstance, execution and registration of Sale Deed by Defendant No.2, being the President of the Society, shall be deemed to have been within the knowledge of the Society as on the date of execution and registration of the Sale Deed.
O.S.NO.3886/2010 54 37.12) In Lachhman Dass vs. Jagat Ram, [(2007) 2 SCR 980], the Hon'ble Supreme Court was pleased to reiterate the principle of law that the execution of a registered deed of sale is also to be treated as a notice in terms of Section 3 of the Transfer of Property Act, 1882.
37.13) Thus, Society, being the party to the Sale Deed, cannot say that it is ignorant about the Sale Deed. In that view, it ought to have filed the suit within three years from the date of execution of the Sale Deed. However, same has been filed after lapse of 8 years.
37.14) Society's contention is that the present President came to the knowledge of the Sale Deed in the month of February 2009. Said contention has been falsified by the list of allottees produced in W.P.No.40994/2004 [same has been marked at Ex.D.1 in O.S.No.3884/2010]. It makes it clear that O.S.NO.3886/2010 55 as per the report of the Board of Directors of the Society dated 17.01.2006, Society filed list of names of the allottees before the Hon'ble High Court of Karnataka. Said list includes the name of Defendant No.1 also. In that view, there is no substance in the contention of the Society that it came to know about the Sale Deed in February 2009.
37.15) Assuming that Society did not notice of the execution of Sale Deed on 05.01.2002, if the report dated 17.01.2006 of the Board of Directors of the Society is considered as date of knowledge, suit ought to have been filed on or before 17.06.2009. However, the same has been filed on 07.06.2010. In that count also, suit filed by the Society is barred by limitation, accordingly, I answer the above issue in the affirmative.
O.S.NO.3886/2010 56
38) Additional Issue No.2 framed on 22.02.2014 : During the trial of the suit, Defendant No.2 passed way and therefore, the question of considering the said issue does not arise.
39) Issue No.6 : In the instant case, Society seeks declaration declaring the Sale Deed as null and void and not binding on it without there being sought the relief of possession. As observed above, it has been established that Defendant No.1 has been in lawful possession and enjoyment of suit schedule property on the basis of the Sale Deed validly executed by the Society.
39.1) Proviso to Section 34 of the Specific Relief Act, 1963 makes it clear that no Court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so.
O.S.NO.3886/2010 57 39.2) In Aralappa vs. Jagannath, [AIR 2007 KAR 91], the Hon'ble High Court of Karnataka was pleased to hold that where the plaintiff is out of possession of the land and does not seek relief of possession, a mere suit for declaration is not maintainable. 39.3) It is to be noticed that, while passing the order dated 28.09.2015 on payment of court- fee, this Court, in para-6 of the Order, observed as under :
"6. Subsequently the plaintiffs got amended the plaint and in addition to the existing relief, the plaintiffs also sought for the alternative relief of declaration to declare that the plaintiffs are the owners of the suit property and directing the 1 st defendant to hand over the vacant possession of the suit property to the plaintiffs."
39.4) In the operative portion of the order dated 28.9.2015, it is ordered as follows :
"However, in view of the subsequent amendment to the prayer column seeking O.S.NO.3886/2010 58 alternative relief, Plaintiffs are directed to file fresh Valuation Slip accordingly."
39.5) Order-sheet makes it clear that fresh valuation slip has been filed on 12.02.2016. In the fresh valuation slip, number 3 is shown as alternative prayer for declaration and possession and court-fee has been calculated under Section 24(a) read with Sections 38 and 6(3) of the KCF & SV Act. Valuation arrived at is shown as 'nil' in respect of alternative prayer for declaration and possession and it has been mentioned that 'already paid on 07.06.2010'.
39.6) In fact, order-sheet reveals that no such amendment as to alternative prayer for declaration and possession, has been sought for by Plaintiff and no order as such has been passed to the said effect. Order-sheet dated 24.03.2014 goes to show that on 24.03.2014 an order was made to bring the legal heirs of Defendant No.1 and accordingly, counsel O.S.NO.3886/2010 59 for Plaintiff carried out amendment in the cause- title of the plaint on 26.03.2014 by inserting the names of legal heirs of Defendant No.1. Except that, no such order as to alternative prayer for declaration and possession has been passed to carry out amendment in the prayer column of plaint. Be that as it may.
39.7) If it is assumed that there has been an order as observed in order dated 28.09.2015 for amendment as to alternative prayer for declaration and possession, again, it has to said that the alternative prayer for declaration and possession would be barred by limitation as same is being claimed after lapse of 13 years from the date of execution of the Sale Deed.
39.8) As observed above, Defendant No.1 has been in lawful possession of suit schedule property on the basis of the Sale Deed validly executed by O.S.NO.3886/2010 60 the Society. Society has failed to prove that Sale Deed is vitiated by fraud. Moreover, suit has been filed after lapse of 8 years as observed above and same is barred by limitation. In that view, it can be fairly said that Society does not deserve for the relief as prayed in the plaint, accordingly, I answer the above issue in the negative.
40) Issue No.7 : For the foregoing discussion and findings on Issues No.1 to 6 and additional Issues No.1 and 2, I proceed to pass the following :
ORDER (1) Suit filed by Plaintiffs is hereby dismissed.
(2) No order as to costs.
(3) Draw Decree accordingly.
(Dictated to the Judgment Writer directly on computer, typed matter corrected and then pronounced by me in open court, on this the 19th day of April 2022) (RAMA NAIK) VI Addl.City Civil & Sessions Judge Bengaluru City O.S.NO.3886/2010 61 ANNEXURE I. List of witnesses examined on behalf of :
(a) Plaintiffs' side :
P.W.1 - Sri.K.A.Sudhakar, dtd.13.11.2019
(b) Defendants' side :
D.W.1 - Sri.H.M.Venkatesh, dtd.26.07.2021 II. List of documents exhibited on behalf of :
(a) Plaintiffs side :
Ex.P.1 Resolution of Plaintiff Society dated
16.04.2010
Ex.P.2 Certified copy of Sale Deed dated
05.01.2002
Ex.P.3 Office copy of Notice dtd. 31.07.2009 issued
by Secretary of the Plaintiff Society Ex.P.4 RPAD cover Ex.P.4(a) Oiginal Notice dtd.31.07.2009 Ex.P.5 Model Bye-laws of House Building Co-
operative Societies Ex.P.6 Membership Register extract Ex.P.6(a) Notary attested copy of Ex.P.6
(b) Defendants side :
Ex.D.1 Letter dtd. 28.02.2020 issued by BDA regarding Information given under RTI O.S.NO.3886/2010 62 Ex.D.2 Letter dtd.30.11.2007 issued by Plaintiff Society to Sub-Registrar, Yelahanka, Bengaluru, seeking list of 404 site owners as per Order of Hon'ble High Court of Karnataka in WP.No.40994/2002 Ex.D.3 GPA executed by Defendant No.1(b) in favour of DW.1 Ex.D.4 Original Possession Certificate dtd.06.02.2002 Ex.D.5 Property Tax Register Extract Ex.D.6 Katha Certificate Ex.D.7 Permission for construction of house dtd.16.02.2004 issued by City Municipal Council Ex.D.8 Building approved plan Ex.D.9 Receipt for having paid fees for sanction of plan Ex.D.10 Tax Paid Receipt Ex.D.11 To Challans for payment of tax - 5 Nos. Ex.D.15 Ex.D.16 Test Certificate dtd.05.12.2003 issued BESCOM Ex.D.17 Invoice dtd.0.12.2003 Ex.D.18 Electricity Supply approval issued by BESCOM, Byatarayanapura, Yelahanka Sub- Division Ex.D.19 Telephone Registration Card issued by BSNL Ex.D.20 Loan Sanction letter issued by Syndicate Bank O.S.NO.3886/2010 63 Ex.D.21 Gruha Pravesham Invitation Card Ex.D.22 Building Insurance Certificate Ex.D.23 Katha Certificate dtd.29.11.2012 issued by BBMP in the name of Mr.Nihar Venkatesh Ex.D.24 Katha Certificate dtd.29.11.2012 issued by BBMP Ex.D.25 Property Tax Register Extract for the period 2012-2013 Ex.D.26 Property Tax receipts for the year 2016-
To 2017 to 2021-2022 - 6 Nos. Ex.D.31 Ex.D.32 and Photos Ex.D.33 Ex.D.34 CD
VI Addl.City Civil & Sessions Judge Bengaluru City