Karnataka High Court
Smt Jayanthi S Shetty vs State Of Karnataka on 29 October, 2025
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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WP No. 27349 of 2024
C/W WP No. 28076 of 2024
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29TH DAY OF OCTOBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 27349 OF 2024 (CS-RES)
C/W
WRIT PETITION NO. 28076 OF 2024 (CS-RES)
IN W.P.NO.27349/2024
BETWEEN
1. SMT JAYANTHI S SHETTY
AGED ABOUT 75 YEARS,
W/O LATE SADASHIVA SHETTY,
R/AT VENKIBOARDY MUNICIPAL SOCIETY,
BLOCK NO.6, NEAR DR BHARKAS DISPENSARY,
LALGATE, SURAT 395003
2. SMT SUREKHA RAJESH SHETTY
AGED ABOUT 47 YEARS,
D/O LATE SADASHIVA SHETTY,
R/A NO.34/4/4, 3RD CROSS,
Digitally signed
by SHWETHA SHAKTHI GANAPATHINAGAR,
RAGHAVENDRA 3RD STAGE, 4TH BLOCK BASAVESHWARANAGARA,
Location: HIGH BANGALORE 560079
COURT OF
KARNATAKA
3. SMT JYOTHI YATHISH SHETTY
AGED ABOUT 46 YEARS,
D/O LATE SADASHIVA SHETTY,
R/AT NO.191, DHOLE PATIL ROAD,
II KAMLTARA APARTMENTS,
NEAR GANESH TEMPLE, PUNE 411001
4. SRI SURESH SHETTY
AGED ABOUT 43 YEARS,
S/O LATE SADASHIVA SHETTY,
R/AT VENKIBOARDY MUNICIPAL SOCIETY,
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HC-KAR
BLOCK NO.6, NEAR DR BHARKAS DISPENSARY,
LALGATE, SURAT 395003
PETITIONERS 1, 2 AND 3 ARE REPRESENTED BY THEIR
YOUNGER BROTHER AND GPA HOLDER, I.E.,
THE 04TH PETITIONER HEREIN
...PETITIONERS
(BY SRI. ASHOK HARANAHALLI., SR. ADVOCATE FOR
SRI. AJITH A SHETTY., ADVOCATE)
AND
1. STATE OF KARNATAKA
BY ITS PRINCIPAL SECRETARY,
DEPARTMENT OF CO OPERATIVE,
MS BUILDING, BENGALURU 560001
2. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES
MYSORE REGION
PUBLIC OFFICES BUILDING,
OPP CORPORATION OFFICE,
NEW SAYYAJI RAO ROAD,
MYSORE-570024.
3. THE DEPUTY REGISTRAR OF
CO OPERATIVE SOCIETIES
UDUPI, UDUPI DISTRICT 576104
4. THE ASSISTANT REGISTRAR OF
CO OPERATIVE SOCIETIES AND RECOVERY OFFICER
KUNDAPURA SUB DIVISION,
UDUPI TALUK AND DISTRICT 576201
5. THE GENERAL MANAGER
MANGALA CREDIT CO OPERATIVE SOCIETY,
KS RAO ROAD, KODIALBAIL,
MANGALORE 575003
(SOCIETY REGISTERED UNDER THE KARNATAKA
CO-OPERATIVE SOCIETIES ACT)
6. SRI K VAMANA BALIGA
S/O GOPALAKRISHNA BALIGA,
AGED ABOUT MAJOR,
BALIGA COMPOUND, KALYANAPURA,
UDUPI TALUK AND DISTRICT 576201
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7. SRI VISHWANATHA BALIGA
S/O K LAXMINARAYANA BALIGA,
AGED ABOUT MAJOR,
BALIGA COMPOUND,
MALPE CROSS ROAD, SANTHEKATTE,
KALYANAPURAA,
UDUPI TALUK AND DISTRICT 576201
8. SRI NAGESHA NAYAK
S/O GOPALAKRISHNA NAYAK,
AGED ABOUT MAJOR,
R/AT NO.1-2-28, KALSANKA,
UDUPI TALUK AND DISTRICT 576101
9. SRI CHANDRAKANTH P SANU
S/O PURUSHOTHAMA SANU,
AGED ABOUT MAJOR,
R/AT MARUTHI LANE, ALIKE,
MANGALORE 575003
10.SMT SARIKA SHETTY
W/O SRI RATHNAKAR SHETTY,
AGED ABOUT MAJOR,
ROYAL SOFT DRINKS,
TENKABETTU, UPPAR VILLAGE AND POST,
UDUPI TALUK AND DISTRICT 576105
11.DR PRADEEP KUMAR SHETTY
S/O SARVENJA SHETTY,
AGED ABOUT MAJOR,
FLAT NO.301, OBEL RESIDENCY,
ARAKERE, VIJAYA LAYOUT,
BANNERUGATTA ROAD,
BENGALURU 576076
12.SRI RAJANIKANTH NAYAK
S/O KS THIRTHARAJ,
AGED ABOUT MAJOR,
R/AT SUBHASH ROAD, KOPPA TALUK,
CHIKAMAGALURU 577126
.... RESPONDENTS
(BY SRI. YOGESH D. NAIK., AGA FOR R1 TO R4;
SMT. LAKSHMI IYENGAR., SR. ADVOCATE FOR
SRI. N. GOUTHAM RAGHUNATH., ADVOCATE FOR R6 TO R9;
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SRI. JAYKUMAR S. PATIL., SR. ADVOCATE FOR
SRI. RAJESH SHETTIGAR., ADVOCATE FOR R10, R11 & R12;
SRI. VITTAL SHETTY., ADVOCATE FOR R5)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
CERTIORARI, THEREBY SETTING ASIDE THE ORDER DATED 02ND
SEPETEMBER, 2021, PASSED BY THE HON'BLE MINISTER FOR CO-
OPERATION IN REVISION PETITION/APPEAL NO.CO:31:CAP:2014, AS
PER ANNEXURE-X TO THE WRIT PETITION AND ETC.
IN W.P.NO.28076/2024
BETWEEN
1. SMT JAYANTHI S SHETTY
AGED ABOUT 75 YEARS,
W/O LATE SADASHIVA SHETTY,
R/AT VENKIBOARDY MUNICIPAL SOCIETY,
BLOCK NO.6, NEAR DR BHARKAS DISPENSARY,
LALGATE, SURAT 395003
2. SMT SUREKHA RAJESH SHETTY
AGED ABOUT 47 YEARS,
D/O LATE SADASHIVA SHETTY,
R/A NO.34/4/4, 3RD CROSS,
SHAKTHI GANAPATHINAGAR,
3RD STAGE, 4TH BLOCK BASAVESHWARANAGARA,
BANGALORE 560079
3. SMT JYOTHI YATHISH SHETTY
AGED ABOUT 46 YEARS,
D/O LATE SADASHIVA SHETTY,
R/AT NO.191, DHOLE PATIL ROAD,
II KAMLTARA APARTMENTS,
NEAR GANESH TEMPLE, PUNE 411001
4. SRI SURESH SHETTY
AGED ABOUT 43 YEARS,
S/O LATE SADASHIVA SHETTY,
R/AT VENKIBOARDY MUNICIPAL SOCIETY,
BLOCK NO.6, NEAR DR BHARKAS DISPENSARY,
LALGATE, SURAT 395003
PETITIONERS 1, 2 AND 3 ARE REPRESENTED BY THEIR
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HC-KAR
YOUNGER BROTHER AND GPA HOLDER, I.E.,
THE 04TH PETITIONER HEREIN
..PETITIONERS
(BY SRI. ASHOK HARANAHALLI., SR. ADVOCATE FOR
SRI. AJITH A SHETTY., ADVOCATE)
AND
1. STATE OF KARNATAKA
BY ITS PRINCIPAL SECRETARY,
DEPARTMENT OF CO OPERATIVE,
MS BUILDING, BENGALURU 560001
2. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES
MYSORE REGION
PUBLIC OFFICES BUILDING,
OPP CORPORATION OFFICE,
NEW SAYYAJI RAO ROAD,
MYSORE-570024.
3. THE DEPUTY REGISTRAR OF
CO OPERATIVE SOCIETIES
UDUPI, UDUPI DISTRICT 576104
4. THE ASSISTANT REGISTRAR OF
CO OPERATIVE SOCIETIES AND RECOVERY OFFICER
KUNDAPURA SUB DIVISION,
UDUPI TALUK AND DISTRICT 576201
5. THE GENERAL MANAGER
ABHYUDAYA CO-OPERATIVE BANK LIMITED
FORMERLY KNOW AS
JANATHA CO-OPERATIVE BANK LIMITED
CAR STREET ROAD,
UDUPI-576101
6. SRI K VAMANA BALIGA
S/O GOPALAKRISHNA BALIGA,
AGED ABOUT MAJOR,
BALIGA COMPOUND, KALYANAPURA,
UDUPI TALUK AND DISTRICT 576201
7. SRI VISHWANATHA BALIGA
S/O K LAXMINARAYANA BALIGA,
AGED ABOUT MAJOR,
BALIGA COMPOUND,
MALPE CROSS ROAD, SANTHEKATTE,
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KALYANAPURAA,
UDUPI TALUK AND DISTRICT 576201
8. SRI NAGESHA NAYAK
S/O GOPALAKRISHNA NAYAK,
AGED ABOUT MAJOR,
R/AT NO.1-2-28, KALSANKA,
UDUPI TALUK AND DISTRICT 576101
9. SRI CHANDRAKANTH P SANU
S/O PURUSHOTHAMA SANU,
AGED ABOUT MAJOR,
R/AT MARUTHI LANE, ALIKE,
MANGALORE 575003
10.SMT SARIKA SHETTY
W/O SRI RATHNAKAR SHETTY,
AGED ABOUT MAJOR,
ROYAL SOFT DRINKS,
TENKABETTU, UPPAR VILLAGE AND POST,
UDUPI TALUK AND DISTRICT 576105
11.DR PRADEEP KUMAR SHETTY
S/O SARVENJA SHETTY,
AGED ABOUT MAJOR,
FLAT NO.301, OBEL RESIDENCY,
ARAKERE, VIJAYA LAYOUT,
BANNERUGATTA ROAD,
BENGALURU 576076
12.SRI RAJANIKANTH NAYAK
S/O KS THIRTHARAJ,
AGED ABOUT MAJOR,
R/AT SUBHASH ROAD, KOPPA TALUK,
CHIKAMAGALURU 577126
.... RESPONDENTS
(BY SRI. YOGESH D. NAIK., AGA FOR R1 TO R4;
SMT. LAKSHMI IYENGAR., SR. ADVOCATE FOR
SRI. N. GOUTHAM RAGHUNATH., ADVOCATE FOR R6;
SRI. JAYKUMAR S. PATIL., SR. ADVOCATE FOR
SRI. RAJESH SHETTIGAR., ADVOCATE FOR R10, R11 & R12;
SRI. HARSHITHA.S., ADVOCATE FOR R6 TO R9;
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R5-SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
CERTIORARI, THEREBY SETTING ASIDE THE ORDER DATED 02ND
SEPETEMBER, 2021, PASSED BY THE HON'BLE MINISTER FOR CO-
OPERATION IN REVISION PETITION/APPEAL NO.CO:32:CAP:2014, AS
PER ANNEXURE-N TO THE WRIT PETITION AND ETC.
THESE WRIT PETITIONS COMING ON FOR ORDERS AND
HAVING BEEN RESERVED FOR ORDERS ON 28.04.2025, THIS DAY,
THE COURT PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CAV ORDER
1. The Petitioners in W.P.No.27349/2024 are before this
court seeking for the following reliefs:
a. Issue a writ of certiorari, thereby setting aside the
order dated 02nd September, 2021 passed by the
Hon'ble Minister for Co-operation in Revision
Petition/Appeal No. CO:31:CAP:2014, as per
Annexure-X to this writ petition;
b. Issue a writ of certiorari, thereby setting aside the
order dated 03rd January, 2013 passed by R3 in
Appeal No.05/2012-13, as per Annexure-W to this
Writ Petition;
c. Issue a writ of certiorari, thereby setting aside the
awards dated 03rd January, 2004, passed in Dispute
Numbers 1049/2003-04 and 1050/2003-04, passed
by R2 as per Annexure-E and F respectively, to this
writ petition.
d. Issue a writ of certiorari, thereby setting aside the
auction sale dated 15th December, 2004 in CEP
NO.467/2004-05 and CEP NO. 468/2004-04 in
favour of R10 as per Annexure-G and H respectively.
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e. Issue a writ of certiorari, thereby setting aside the
confirmation of sale dated 01st September, 2005 as
per Annexure-J made in favour of R10;
f. Grant such other relief's as this Hon'ble Court would
be pleased to grant under the facts and
circumstances of the present case in the interest of
justice and equity.
2. The Petitioners in W.P.No.28076/2024 are before this
court seeking for the following reliefs:
a. Issue a writ of certiorari, thereby setting aside the
order dated 02nd September, 2021 passed by the
Hon'ble Minister for Co-operation in Revision
Petition/Appeal No. CO:32:CAP:2014, as per
Annexure-X to this writ petition;
b. Issue a writ of certiorari, thereby setting aside the
order dated 13th February, 2014 passed by R3 in
Appeal No.02/2013-14, as per Annexure-M to this
Writ Petition;
c. Issue a writ of certiorari, thereby setting aside the
awards dated 24th March, 2003, passed in Dispute
Numbers 412/2002-03, passed by R2 as per
Annexure-G, to this writ petition.
d. Issue a writ of certiorari, thereby setting aside the
auction sale dated 20th September, 2007 made in
Execution Petition No.CEP 39/2023-04;
e. Issue a writ of certiorari, thereby setting aside the
confirmation of sale dated 05th November, 2007 as
per Annexure-H made in favour of R10;
f. Grant such other relief's as this Hon'ble Court would
be pleased to grant under the facts and
circumstances of the present case in the interest of
justice and equity.
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Facts in WP No.27349/2024.
3. The Petitioners claim to be the children of late Sadashiva Shetty. They claim that the lands in survey No. 127/6, 130/14, 130/3, 127/3 and 126/4 of Shivalli village, Udupi Taluk and District belonged to the ancestors of late Sadashiva Shetty on a leasehold basis.
4. With the amendment to the Karnataka Land Reforms Act 1971, the maternal uncle of late Sadashiva Shetty, namely Sri. Ellappa Shetty had put forth a claim for grant of occupancy rights, which was granted on 12.10.1981. Subsequently, a deed of partition came to be executed on 22.05.1990 between the family members, namely Ms Sunanda Shetty and Sadashiva Shetty, whereunder the lands bearing Survey Nos.130/3, 126/4, and 126/3, measuring 2 acres 32 cents/guntas, were allotted to Sadashiva Shetty, who had by then relocated himself from Udupi to Surat in Gujarat. There was an error in
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR the order of the Land Tribunal; by mistake, the land in survey No.127/6 was mentioned, which was to be replaced with Survey No.126/5.
5. A general power of attorney was executed on 15.04.1998 by late Sadashiva Shetty in favour of Vamana Baliga in respect of the aforesaid property.
6. In pursuance of the aforesaid power of attorney, the aforesaid Vamana Baliga, along with his business associates, namely Vishwanath Baliga and Nagesh Nayak [hereinafter referred to as 'borrowers'], are stated to have availed a loan on 09.05.2000 from Mangala Credit Cooperative Society-Respondent No.5 herein [hereinafter referred to as 'Mangala']. Towards the said loan, the aforesaid properties owned by Sadashiva Shetty were mortgaged by relying upon the GPA.
7. On 02.08.2000, promissory notes were executed by Vamana Baliga, Vishwanath Baliga and Nagesh Nayak, in favour of Mangala. On 17.02.2003,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Sadashiva Shetty expired. In the meantime, the borrowers had defaulted in repaying their debts. On 03.01.2004, Mangala filed a proceeding under Section 70 of the Karnataka Co-operative Societies Act, 1959 [hereinafter referred to as the 'KCS Act 1959'], for recovery of the said moneys.
8. The Joint Registrar of Co-operative Societies [hereinafter referred to as 'JRCS'] passed an award in case No.1049 of 2003-04 and 1050 of 2003-04. Execution petitions having been filed under Rule 30 and Sub-rule (1) and (2) of Rule 34 of the Karnataka Corporative Societies Rules, 1960 [hereinafter referred to as 'KCS Rules 1960'] on 03.01.2005 and 31.01.2005, auction notices were issued by Mangala. An auction was held on 11.03.2005, wherein Smt. Sarika Shetty, Respondent No.10, was declared as the highest bidder [hereinafter referred to as 'Purchaser'].
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9. On 07.05.2005, the borrowers questioned the auction sale, which was rejected by an order dated 24.04.2006 by the Appellate Authority. Thereafter, a revision petition was filed before the State Government in CMW 64-CAP-2007, the State Government confirmed the order of the Appellate authority on 06.10.2010. Further, on 01.09.2005, a sale confirmation had been issued in favour of the purchaser with respect to the land bearing Survey Nos.126/3, 126/4 and 126/5 of Shivalli Village, Udupi. On 14.11.2007, a certificate of sale was issued in favour of the purchaser. Then, on 07.08.2009, the purchaser executed two separate deeds of sale, one in respect of lands under Survey No.130/3 in favour of Respondent No.12-Rajnath Nayak, and another as regards survey No.126/3, in favour of Respondent No.11-Dr.Pradeep Kumar Shetty, there being no order injuncting such sale during the pendency of the appeal or revision.
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10. Claiming that the Petitioners only came to know about this subsequently, they had filed a suit in O.S.No.44/2009 seeking for declaratory and injunctive reliefs, which came to be dismissed on 23.06.2015 on the ground that, what was challenged were the orders which are subject matter of the proceeding before the JRCS under the KCS Act, 1959 and before the Execution Court under the KCS Rules, 1960.
11. Appeal No.5 of 2012-13 was filed by the legal heirs of late Sadashiva Shetty, which was rejected on 03.01.2013. The Petitioners also approached the Hon'ble Minister for Cooperation by way of a revision petition under Section 108 of the KCS ACT 1959, which also came to be rejected by the order dated 02.09.2021 and in that background, the petitioner had filed a writ petition in WP No.129/2024, which came to be withdrawn by them on account of the papers filed therein being flawed with liberty to file a
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR fresh petition and in that background, WP No.27349/2024 has been filed seeking for the aforesaid reliefs.
Facts in WP 28076:
12. The facts in this matter are more or less similar, except that in terms of the power of attorney executed by Sadashiva Shetty in favor of Vamana Baliga, the very same Vamana Baliga, Vishwanath Baliga and Nagesh Nayak, who have been referred to as borrowers had on 09.05.2000 availed a loan from Janata Credit Co-operative Society [hereinafter referred to as 'Janata'], and thereafter promissory notes were executed by them.
13. Due to defaults in payment of the loan amount, Janata, which is now taken over by Abhyudaya Co-
operative Bank Limited-Respondent No.5 [hereinafter referred to as 'Janata/Abhyudaya'] filed a Petition under Section 70 of the KCS Act for recovery of the amount borrowed in Case No.412 of 2002-03,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR wherein an award came to be passed in favour of Janata. On 15.12.2004, execution petitions were filed under Sub-rule (1) and (2) of the KCS Rules 1960 and also on 03.01.2005 & 31.01.2005. Subsequently, pre-auction notices were issued by the society.
14. The very same Smt.Sarika Shetty-purchaser, was declared as the highest bidder for lands bearing Survey Nos.126/5 and 130/3, totally measuring 1 acre 14 cents on 05.11.2007.
15. This sale and other auctions had also been challenged in the aforesaid O.S.No.44/2009, the details thereof having been stated with reference to the facts in W.P.No.27349/2024. The petitioners had filed an appeal No.02/2003, which came to be dismissed. The review petition under Section 108 of the KCS Act, 1959, having been filed before the Hon'ble Minister for Cooperation, the same came to be rejected vide order dated 02.09.2021. It is in that
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16. Sri. Ashok Haranahalli, learned Senior Counsel, appearing for the Petitioners in both the matters, would submit that, 16.1. The mortgage executed by the borrowers is void ab initio. In this regard, he relies upon Section 58 of the Transfer of Property Act 1982 [hereinafter referred to as 'TP Act']. Section 58 of the TP Act is reproduced hereunder for easy reference:
58. Mortgage, mortgagor, mortgagee, mortgage-money and mortgage- deed defined.
(a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being arc called the mortgage -money, and the instrument (if any) by which the transfer is effected is called a mortgage - deed.
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(b) Simple mortgage.-- Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.
(c) Mortgage by conditional sale.-- Where the mortgagor ostensibly sells the mortgaged property-- on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or on condition that on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale:
[Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.]
(d) Usufructuary mortgage.-- Where the mortgagor delivers possession 2[or expressly or by implication binds himself to deliver possession] of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage -money, and to receive the rents and profits accruing from the property 3[or any part of such rents and profits and to appropriate the same] in lieu of interest, or in payment of the mortgage -money, or partly in lieu of interest 4[or] partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.
(e) English mortgage.-- Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.
(f) Mortgage by deposit of title-deeds.-- Where a person in any of the following towns, namely, the towns of Calcutta, Madras 6[and Bombay], 7*** and in any other town which the 8[State Government concerned] may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title- deeds.
(g) Anomalous mortgage.-- A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.] 16.2. He submits that a mortgage is a bipartite agreement requiring the borrower to deposit his interest in an immovable property with the lender as security. In the present case, none of the borrowers in the present matter had any interest in the property. The only connection that could be said to be held is by Vamana Baliga, who is one of the borrowers, under a power of attorney executed in his favour.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 16.3. The power of attorney not providing any interest in the property, the question of Vamana Baliga, along with the other borrowers, having made available the property of Sadashiva Shetty as security to Mangala or Janata/Abhyudaya would not arise. There could be no mortgage which could have been created by the power of attorney for a loan borrowed by the power of attorney without the Principal Sadashiva Shetty having received any amounts. 16.4. He refers to Sections 182 and 183 of the Indian Contract Act 1872 [hereinafter referred to as 'ICA 1872'], which are reproduced hereunder for easy reference:
182."Agent" and "principal" defined.--An "agent"
is a person employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the "principal".
183. Who may employ agent.--Any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 16.5. By referring to the above provisions, he submits that an agent is a person employed to do any act for another or to represent another in dealing with third persons. The principal is the person for whom such an act is done or who is so represented. Therefore, he submits that in terms of Section 182, for Sadashiva Shetty, to be deemed to be the principal, the action of Vamana Baliga ought to have been in the name of and for and on behalf of Sadashiva Shetty, more particularly at the instruction of Sadashiva Shetty, thus representing Sadashiva Shetty in the present matter.
16.6. Vamana Baliga, being the power of attorney and the other borrowers having borrowed monies for their own businesses and not on behalf of Sadashiva Shetty, hence the question of there being any principal-agent relationship
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR between Sadashiva Shetty, on the one hand, and Vamana Baliga, on the other hand, let alone the other borrowers, would not arise. The borrowing, if any, could have been made only in the name of Sadashiva Shetty, and the borrowed money had to flow into the account of Sadashiva Shetty, in the present case, borrowing being made by the borrowers in their individual capacity, a mortgage under a power of attorney could not have been created by them as regards the property of Sadashiva Shetty.
16.7. He reiterates that all documents have been signed only by Vamana Baliga and other borrowers; no document has been signed by Sadashiva Shetty in respect of the transaction with Mangala or Janata/Abhyudaya.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 16.8. He relies upon Section 28 of the Negotiable Instruments Act 1881, which is reproduced hereunder for easy reference:
28. Liability of agent signing.--An agent who signs his name to a promissory note, bill of exchange or cheque without indicating thereon that he signs as agent, or that he does not intend thereby to incur personal responsibility, is liable personally on the instrument, except to those who induced him to sign upon the belief that the principal only would be held liable.
16.9. By relying on Section 28, he submits that the alleged agent-Vamana Baliga and the other borrowers having executed a negotiable instrument, namely a promissory note in their own individual capacity without naming Sadashiva Shetty and or stating that they were executing the promissory note on behalf of Sadashiva Shetty, they would themselves be liable for any action on the said promissory note, and no action could be taken against Sadashiva Shetty on account of such promissory note.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 16.10. He reiterates that all the borrowings having occurred in the name of Vamana Baliga and other borrowers, the charge, if any, not created on behalf of Sadashiva Shetty, but on their own behalf, Sadashiva Shetty would not be responsible for any of the claims of Mangala or Janata/Abhyudaya as regards the loan borrowed by Vamana Baliga and other borrowers.
16.11. A mortgage of a property having been created, the property documents having been made available to Mangala and Janata/Abhyudaya, they were aware that the owner of the property was Sadashiva Shetty, and yet the loan was sanctioned in favour of Vamana Baliga and other borrowers. Since Sadashiva Shetty has not borrowed any money, the question of Sadashiva Shetty being responsible for servicing any loan would not at all arise.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 16.12. He relies upon Section 60 of the KCS Act 1959, which is reproduced hereunder for easy reference:
60. Restrictions on loans.
(1)A co-operative society shall not make a loan to any person other than a member:
Provided that with the general or special sanction of the Registrar, a co-operative society may make loans to another co-operative society.
(2)Notwithstanding anything contained in sub-section (1), a co-operative society may make a loan to a depositor on the security of his deposit.
16.13. By relying on Section 60, he submits that a cooperative society shall not lend any money to a person other than a member. Sadashiva Shetty not being a member, no loan could have been or has been sanctioned in favour of Sadashiva Shetty; however, it is Vamana Baliga and other borrowers who are members, in whose favour the loan had been sanctioned. Thus, even according to law, no loan being capable of being sanctioned in favour of
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Sadashiva Shetty by a cooperative society/bank, loan having been sanctioned in favor of Vamana Baliga and other borrowers, the said cooperative banks could have only proceeded against the borrowers and not as regards the property of Sadashiva Shetty who had neither mortgaged the property nor borrowed any monies from the aforesaid bank. In this regard, he relies on Section 33 of the KCS Act 1959, which is reproduced hereunder for easy reference:
33. Charge on land, owned by members or held as tenants by members borrowing loans from certain co-operative societies.
(1)Notwithstanding anything contained in this Act or in any other law for the time being in force,-
(i)any person who makes an application to a co-
operative society of which he is a member for a loan shall, if he owns any land, or holds any land as a tenant make a declaration in the prescribed form. Such declaration shall state that the applicant thereby creates a charge on the land owned by him or on his interest in the land held by him as tenant and specified therein for the payment of the amount of the loan which the society may make to the member in pursuance of the application and for all future advances, if any, required by him which the society may make to the member as such member subject to
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR such maximum as may be determined by the society together with interest on such amount of the loan and advances;
(ii)a declaration made under clause (i) may be varied at any time by a member with the consent of the co- operative society in favour of which such charge is created;
(iii)no member shall alienate the whole or any part of the land or any interest of his in the land specified in the declaration made under clause (i) or varied under clause (ii) until the whole amount borrowed by the member together with interest thereon is paid in full:
Provided that standing crops on any such land may be alienated with the previous permission in writing of the society;
Provided further that it shall be lawful for a member to mortgage such lands or any part thereof in favour of the State Government or an [Agricultural and Rural Development Bank] [Provisos inserted by Act 39 of 1975 w.e.f. 23.09.1975.]:
Provided also that if a part of the amount borrowed by a member is paid, the co-operative society with the approval of the financing bank to which it may be indebted may, on an application from the member, release from the charge created by the declaration made under clause (i) or varied under clause (ii), such part of the land or of the interest in the land specified in the declaration as it may deem proper, with due regard to the security for the balance of the amount of loan outstanding from the member.]
(iv)any alienation made in contravention of the provisions of clause (iii) shall be void;
(v)subject to the prior claims of the Government in respect of land revenue or any money recoverable as land revenue and the prior claims of any person in whose favour alienation of the land or interest in such land has been effected and duly registered, before the date of the grant of the loan by the society, there shall be a first charge in favour of the society on the land or interest in the land specified in the declaration made
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR under clause (i) or varied under clause (ii) for and to the extent of the dues owing by him on account of the loan.
(2)Notwithstanding anything contained in [the Karnataka Land Revenue Act, 1964 (Karnataka Act 12 of 1964)] [Substituted by Act 39 of 1975 w.e.f. 23.09.1975.],-
(i)the record of rights maintained under the said Act shall also include the particulars of every charge on land or interest in land created under sub-section (1);
(ii)the co-operative society in whose favour a charge is created under sub-section (1) shall communicate the particulars of the charge, and when the loan is discharged, the cessation of the charge, to the Deputy Commissioner or the prescribed officer and he shall cause necessary entries to be made in the record of rights;
(iii)the State Government may, by notification in the official Gazette, make rules to carry out the purposes of clauses (i) and (ii).
Explanation. - For the purpose of this section,- (1)'land' shall mean land to which [the Karnataka Land Revenue Act, 1964 (Karnataka Act 12 of 1964)] [Substituted by Act 39 of 1975 w.e.f. 23.09.1975.], is applicable; and (2)'co-operative society' shall mean a co-operative society of which majority of the members are agriculturists and which is,-
(a)a credit society the primary object of which is to obtain credit for its members; or
(b)any other class of society specified in this behalf by the State Government by general or special order. 16.14. By relying on Section 33, he submits that the person who makes an application to a
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR cooperative society of which he is a member for a loan shall, if he owns the land, make a declaration to that effect. If he holds the land as a tenant, he has to make a declaration in the prescribed form to such effect. While making such a declaration, the borrower has to categorically state the nature of the rights of the borrower in the land over which such a charge has been created.
16.15. In the present case, as per the documents which have been produced by the bank, there is no such declaration which has been made by the borrowers. The mortgage has been created as if the land belongs to the borrowers, which has been accepted by the cooperative banks, knowing fully well that the borrowers did not own the land, they have not ascertained the nature of interest of the borrowers in the said
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR land, nor have they obtained a declaration in that regard.
16.16. As such, Sri. Ashok Haranahalli submits that the banks could not have proceeded against the properties of Sadashiva Shetty, who had not mortgaged the property or received any loan. He therefore submits that neither the banks nor the borrowers have complied with the requirements of Clause (i) and Clause (ii) of Subsection (1) of Section 33, and therefore the banks cannot invoke any right in respect of the property of Sadashiva Shetty.
16.17. He submits that Vamana Baliga, having acted under a power of attorney, it is only the authorised act on the part of the principal which would bind the principal; the principal is not vicariously responsible for the actions of the power of attorney, and in that regard, he relies
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR upon Section 230 of the ICA 1872, which is reproduced hereunder for easy reference:
230.Agent cannot personally enforce, nor be bound by, contracts on behalf of principal.--In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.
Presumption of contract to contrary--Such a contract shall be presumed to exist in the following cases:--
(1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad;
(2) where the agent does not disclose the name of his principal;
(3) where the principal, though disclosed, cannot be sued.
16.18. By relying on Section 230, he submits that the agent cannot personally enforce nor be bound by contracts on behalf of the principal, where the agent does not disclose the name of the principal. He therefore submits that the presumption under Section 230 would not be applicable unless the name of the principal is disclosed. If the principal remains undisclosed
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR or in the case of a contract of an undisclosed principal, such a principal cannot be made liable. The contract or transaction can only be said to be one which has been executed between the agent and a third party in the individual capacity of the agent and not as an agent of a principal. This is clear from the fact that in none of the documents Vamana Baliga has represented himself to be an agent of Sadashiva Shetty.
16.19. He further submits that despite the claim of Janata/Abhyudaya being only Rs.12,51,049/-, the property was sold for Rs.28,92,000/-, whereas it could have been only Rs.12,51,049/, which could have been sought to be appropriated by Janata/Abhyudaya. Neither Janata/Abhyudaya nor Vamana Baliga and the borrowers have come forward to indicate what has happened to the remaining money. If at all
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR these monies have been given to Vamana Baliga, that would also indicate that the transaction was between Vamana Baliga and Janata/Abhyudaya and not between Sadashiva Shetty and Janata/Abhyudaya.
16.20. He makes similar submissions as regards Mangala by stating that the amount due was only Rs.8,54,016/- and the property was sold for Rs.21,63,000/- and neither Mangala nor Vamana Baliga have made it clear as to what has happened to the balance amounts. 16.21. He submits that the appellate authority has not discharged its obligation under Section 101 of the KCS Act 1959. Section 101 is reproduced hereunder for easy reference:
101. Execution of orders, etc. Every order made by the Registrar under sub-section [(1)] [Substituted by Act 19 of 1976 w.e.f. 20.01.1976.] of section 69 or under section 99, every decision or award made under section 71, every order made by the Liquidator under section 74 and every order made by the Tribunal under sections 105 and 107, and every order made under section 106 or 108
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR shall subject to any other provision of this Act be binding on the person or co-operative society against whom the order, decision or award has been obtained or passed and shall, if not carried out,-
(a)on a certificate signed by the Registrar, or any person authorized by him in this behalf, be deemed to be a decree of a civil court and shall be executed in the same manner as a decree of such court; or
(b)be executed according to the law and under the rules for the time being in force for the recovery of arrears of land revenue:
Provided that an application for the recovery in such manner of any sum shall be made,-
(i)to the Deputy Commissioner and shall be accompanied by a certificate signed by the Registrar or by any person authorized by him in this behalf;
(ii)within twelve years from the date fixed, in the order, decision or award, and if no such date is fixed, from the date of the order, decision or award, as the case may be; or
(c)be executed by the Registrar or any other person subordinate to him empowered by the Registrar in this behalf, by the attachment and sale or sale without attachment of any property of the person or a co-
operative society against whom the order, decision or award has been obtained or passed. (2)[ (a) Notwithstanding anything contained in this Act every question relating to the execution, discharge or satisfaction of an order, decision or award referred to in sub-section (1) or relating to the confirmation or setting aside of a sale held in an execution of such order, decision or award in pursuance of clause (c) of sub-section (1), or relating to any claim or objection to an attachment of any property made under section 103 or in execution in pursuance of the said clause (c), shall
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR be determined, by an order of the Registrar or any other person subordinate to him, empowered by the Registrar under the said clause (c) (hereinafter in this section referred to as "authorized person") before whom such question arises.
(b)(i)Where any claim is preferred against, or any objection is made to, the attachment of any property made under section 103 or in execution in pursuance of clause (c) of sub-section (1), on the ground that the said property is not liable to such attachment, the Registrar or the authorized person shall proceed to investigate the claim or objection:
Provided that where the Registrar or the authorized person considers that the claim or objection was designedly or unnecessarily delayed, he shall make an order refusing such investigation;
(ii)Where, upon the said investigation, the Registrar or the authorized person is satisfied that for the reason stated in the claim or objection, such property was not, at the date of the attachment, in the possession of the person or co-operative society against whom the order, decision or award has been obtained or passed (hereinafter in this section referred to as the "judgment-debtor") or of some person in trust for the judgement-debtor or in the occupancy of a tenant or other person paying rent to the judgement-debtor or that, being in the possession of the judgement-debtor at the said date, it was so in his possession, not in his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Registrar or the authorized person shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR
(iii)Where the Registrar or the authorized person is satisfied that the property was, on the said date, in the possession of the judgement-debtor as his own property and not on account of any other person, or was in the occupancy of a tenant or other person paying rent to him, the Registrar or the authorized person shall disallow the claim;(iv)Where a claim or an objection is preferred, the party against whom an order is made may within a period of one year from the date of such order, institute a suit in a civil court to establish the right which he claims to the property in dispute; but, subject to the result of such suit, if any, the order of the Registrar or the authorized person shall be conclusive.] 16.22. His submission is that the possession of the property has been held in trust by Vamana Baliga, and the said possession not being held in the individual capacity of Vamana Baliga or any of the borrowers, the appellate authority ought to have verified and taken note of this fact and allowed the appeal filed by the Petitioners.
16.23. Similar is the submission made as regards the orders passed by the Revisional Authority under
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Section 108, Section 108 of the KCS Act is reproduced hereunder for easy reference:
108. Powers of revision of State Government.
- [Subject to the provisions of section 108A, the State Government] [Substituted by Act 39 of 1975 w.e.f. 23.09.1975.] suo motu at any time, and, on application of any person aggrieved, within a period of six months from the date of any order, may call for and examine the record of any case or proceedings of any officer subordinate to it except those subject to appeal or revision by the Tribunal or those in respect of which an appeal has been made to the State Government under section 106, and the State Government after such enquiry as it deems fit is satisfied that the order of the officer is contrary to law and has resulted in a miscarriage of justice, pass such orders thereon as the State Government deems just:
Provided that no order shall be made to the prejudice of any person under this section unless he has been given a reasonable opportunity of being heard.
16.24. He submits that the Revisional Authority also ought to have taken into consideration the above factors, which have not been so taken.
Merely because there is a mortgage created by a power of attorney holder, the same cannot bind the principal and his legal representatives now. Moreso when the principal never
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR authorised the mortgage of the land in the individual capacity of the power of attorney, no loan having been borrowed in the name of the principal, the question of the principal's land being sold on account of default by the agent- borrower would not arise.
16.25. He relies upon the decision of the Hon'ble Apex Court in Bharati Cellular Limited (Now Bharati Airtel Limited) -v- Assistant Commissioner of Income Tax1, more particularly, para nos. 8 and 9 thereof, which are reproduced hereunder for easy reference:
8. Agency is therefore a triangular relationship between the principal, agent and the third party. In order to understand this relationship, one has to examine the inter se relationship between the principal and the third party and the agent and the third party. When we examine whether a legal relationship of a principal and agent exists, the following factors/aspects should be taken into consideration:
(a) The essential characteristic of an agent is the legal power vested with the agent to alter his principal's legal relationship with a third party and the principal's co-
relative liability to have his relations altered. 1 [2024] 02 SCR 1001
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR
(b) As the agent acts on behalf of the principal, one of the prime elements of the relationship is the exercise of a degree of control by the principal over the conduct of the activities of the agent. This degree of control is less than the control exercised by the master on the servant, and is different from the rights and obligations in case of principal to principal and independent contractor relationship.
(c) The task entrusted by the principal to the agent should result in a fiduciary relationship. The fiduciary relationship is the manifestation of consent by one person to another to act on his or her behalf and subject to his or her control, and the reciprocal consent by the other to do so.
(d) As the business done by the agent is on the principal's account, the agent is liable to render accounts thereof to the principal. An agent is entitled to remuneration from the principal for the work he performs for the principal.
9. At this stage, three other relevant aspects/considerations should be noted. First is the difference between 'power' and 'authority'. The two terms though connected, are not synonymous. Authority refers to a factual position, that is, the terms of contract between the two parties. The power of the agent however, is not, strictly speaking, conferred by the contract or by the principal but by the law of agency. When a person gives authority to another person to do the acts which bring the law of agency into play, then, the law vests power with the agent to affect the principal's legal relationship with the third parties. The extent and existence of the power with the agent is determined by public policy. The authority, as observed above, refers to the factual situation. The second consideration is that the primary task of an agent is to enter into contracts on behalf of his
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR principal, or to dispose of his principal's property. The factors mentioned in clauses (b) to (d) in paragraph 8 above flow, and are indicia of this primary task. Clauses
(b) to (d) of paragraph 8 are useful as tests or standards to examine the true nature or character of the relationship. Lastly, the substance of the relationship between the parties, notwithstanding the nomenclature given by the parties to the relationship, is of primary importance. The true nature of the relationship is examined by reference to the functions, responsibility and obligations of the so-called agent to the principal and to the third parties. 16.26. By relying on Bharati Cellular's case, he submits that the agent acts in a fiduciary capacity and, as such, the agent is required to act in the name of the principal, so that it is the principal's legal relationship with the third party that is affected by such action. There being no such legal relationship created between the principal, Sadashiva Shetty, and Mangala or Janata/Abhyudaya, there is no binding contract or agreement which has been entered into by Vamana Baliga on behalf of Sadashiva Shetty with the said banks; therefore, there is no
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR action taken by Vamana Baliga on behalf of Sadashiva Shetty.
16.27. He relies upon the decision of the Hon'ble Madras High Court in Sivagurunatha Pillai - v- Padmavathi Ammai and another2, more particularly Para No.28 thereof, which is reproduced hereunder for easy reference:
28. An Agent who signs his name to a promissory note, bill of exchange or cheque without indicating thereon that he signs as agent or that he does not intend to incur personal responsibility, is liable personally on the instrument, except to those who induced him to sign upon the belief that the principal only would be held liable.
16.28. By relying on Sivagurunatha Pillai's case, he submits that if an agent were to sign his name on a promissory note, bill of exchange or cheque without indicating that he signs as an agent or that he does not intend to incur personal responsibility, the agent shall be personally responsible and liable on the instrument except to those who induced him to 2 AIR 1941 MADRAS 417
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR sign upon the belief that the principal only would be held liable. In this case, he submits that the banks, being clearly aware that the property belonged to Sadashiva Shetty, could not have lent monies to Vamana Baliga and other borrowers based on a charge created on Sadashiva Shetty's property. Since the bank has lent the money without Sadashiva Shetty being a party to the said transaction, and it is Vamana Baliga and other borrowers who have signed the promissory note, the bank could only proceed against Vamana Baliga and other borrowers.
16.29. He relies upon the decision of this Court in Shri J. Ramaraj S/o Sri.Jyothi Raj vs Iliyaz Khan S/o Janab Mohammed Ismail3, more particularly para nos. 12 to 19 thereof, which are reproduced hereunder for easy reference: 3
ILR 2006 KAR 4672
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR
12. In so far as discharge of initial burden on the part of the complainant is concerned, he has specifically stated as to supply of potatoes on various dates but, the details of the same has not been furnished which is the only grouse according to the petitioner. But, according to practise, as a Commission Agent when the complainant used to supply the goods through the possession of the farmers, on commission basis and if it is kept in cold storage and supplied to the accused directly as noted by the learned Magistrate, there would not be any record available in the APMC for having supplied the potatoes to the petitioner. If really the petitioner was serious, he would have sought the complainant to produce the records in this regard and the account books maintained by him nor has he himself produced any account books maintained by him in his regard. It appears as an alternative defense, petitioner has tried to shift the burden stating that it is the company which is the Principal and the petitioner is only a commission agent and relying upon S. 28 of the Negotiable Instruments Act, contended that the principal is liable and not the commission agent. In this regard, the petitioner has also sought the assistance of various provisions under the Negotiable Instruments Act to stand by his contention that primarily the principal is liable and not the agent. Even as per S. 141 of the Negotiable Instruments Act, the petitioner being an agent who had transacted the business on behalf of the company and much less he is signatory to the cheque renders himself liable and shall be liable to be proceeded against. It is well settled that company alone or the person in charge of business of company alone or both can be prosecuted for offence under S. 138 of the Negotiable Instruments Act.
13. In so far as contract of agency is concerned, might be the principal is liable for the act of the agent. S. 222 of the Indian Contract Act, 1872 provides that the agent can be indemnified against consequences of all lawful acts and for which the principal is liable. If the agent wants to take the shelter that it is the principal who is liable and not the agent and of course, for his acts or breach committed by him, the principal would be liable, but it does not necessarily convey the meaning that primarily the principal alone could be
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR proceeded with and not against the agent. More over, there are certain obligations cast upon the agent as duties towards the principal. As is well settled, the principal is liable for all lawful acts of the agent. Similarly, the agent is bound to render proper accounts to his principal and to communicate to the principal and he has to use all reasonable diligence in doing so. It appears, nowhere the petitioner has placed any material nor brought to the notice of the complainant that the transaction is directly between the company and the complainant and that the petitioner has got nothing to do with the transactions. Even if it is taken as a fact that petitioner has acted as an agent of the company of the principal, then necessarily the issuance of notice to this petitioner by the complainant and failure on the part of this petitioner to reply to the same or not intimating the complainant the fact that the primary liability is on the principal for the amount due if any, will estopp the petitioner from taking up such a contention that he is not liable and rather the principal is liable. It really the petitioner has acted on behalf of the principal as an agent, as matter of indemnification, ultimately it is for the petitioner to step into the shoes of the complainant to recover the amount from the principal.
14. When the petitioner did not avail the opportunity of calling for the records nor produced the records from his end to show that no transcation has taken place and when he could not duly discharge the burden, the presumption under S. 139 of the Negotiable Instruments Act goes against the petitioner and presumption stand unrebutted.
15. It is seen, the respect of three cheques issued, the Trial Court has only convicted and sentenced the petitioner to pay the amount of the cheque and a fine of Rs. 3,000/- each and to undergo simple imprisonment for one year each of these cases. The transaction is of the year 2001 and now we are in the fag end of 2006. From a perusal of the impugned order passed by the Courts below and also on hearing the arguments advanced by the counsel for the respective parties and on going through the ration laid down in
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR various decisions cited by the petitioner's counsel, I am of the view that those decisions are of no help to the petitioner. Even S. 28 of the Negotiable Instruments Act clearly lays down the liability of the maker of the instrument. In the case on hand, the drawer of the cheque is not the principal, the petitioner has drawn the cheque and that part cannot be disputed. As rightly noted by both the Courts below, no element of coercion is established by the petitioner against the complainant nor is it even brought to the notice of the complainant that he is only acting as an agent on behalf of the company. No such endorsement is being made by him nor replied in the legal notice issued in this regard.
16. In the ration laid down in the case of M. Mahadevan Pillai v. Smt. Vedavalli Ammal [AIR 1992 SC 183.] , the Madras High Court has held thus:
Knowledge of agency to other party does not free the agent from liability, if he does not disclose on the instrument that he signed as an agent. The principle is that unless the maker has clearly affixed his signature to the instrument as agent or on account of or on behalf of a principal whose name is disclosed or, unless those he has signed unconditionally, he has unequivocally and clearly disclaimed in some portion of the document his own responsibility and mentions the name of the person really liable, he cannot escape liability.
17. Further, S. 28 of the Negotiable Instruments Act reads thus:
Liability of agent signing: An agent who signs his name to a promissory note, bill of exchange or cheque without indicating thereon that he signs as agent, or that he does not intend thereby to incur personal responsibility, is liable personally on the instrument, except to those who induced him to sign upon the belief that the principal only would be held liable.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR
18. The above ratio as well as the legal position makes it clear that the agent will be liable in the absence of any such endorsement being made and also when he fails to establish that he has been induced to sign the cheques on the assurance that the complainant will only proceed against the principal and not against the petitioner/agent. The finding of both the Courts below that the petitioner did not discharge his responsibility by way of rebuttal evidence cannot be faulted with.
19. For the foregoing reasons, as I do not find any illegality in the impugned order of conviction passed by both the Courts below, appeals are dismissed. However, in the interest of justice, the order of sentence to undergo imprisonment for one year in each of these case would be modified and the same shall not be executed if the petitioner pays the amount within three months from the date of receipts of the copy of this order, while maintaining the order of the learned Magistrate as well as the Sessions Judge regarding compensation/fine amount imposed. In the event, the amount is deposited or paid to the complainant within three months from the date of receipt of this order, there shall not be any order to execute the sentence of imprisonment and it shall be treated as deleted or modified or else the petitioner may have to suffer the order in its entirety.
16.30. By relying on Ram Raj's case, he submits that the principal would be liable only if the agent had categorically indicated that he has acted on behalf of the principal, where the agent has acted on his own without indicating that he is
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR acting on behalf of a principal, not intimating the other party that the transaction is being entered into on behalf of the principal, the principal cannot be held to be responsible and it would be the agent alone who would be responsible for the same.
16.31. On the basis of all the above submissions, Sri.Ashok Haranahalli, learned senior counsel, submits that the petitions are required to be allowed and the reliefs sought are granted.
17. Shri. Jayakumar S. Patil, learned Senior counsel appearing for Respondent No.10-purchaser Sarika Shetty submits that;
17.1. Akku Shetty, Anthu Shetty, Durgi Shetty, Thimmappa Shetty, Kokra Shetty and Ellappa Shetty are brothers and sisters. It is Ellappa Shetty who had filed the proceedings before the Land Tribunal on behalf of the family.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 17.2. Akku Shetty expired without marrying, Anthu Shetty had three children, namely Sadashiva Shetty, Bachcha Shetty, Ammanni Shetty. Smt.Durgi Shetty had five children, namely Usha, Chandra, Vijaya, Sushma and Sulochana. Kukra Shetty expired without any legal heirs. Timmappa Shetty expired leaving behind his wife Sundari Shetty. Ellappa Shetty did not have any legal heirs.
17.3. He submits that the aforesaid Sundari Shetty was represented by a power of attorney holder Ratnakar Shetty who is none other than the husband of the purchaser Sarika Shetty. 17.4. The Land Tribunal had granted occupancy rights in respect of survey No. 126/3 measuring 76 cents, survey No. 126/4 measuring 96 cents, Survey no. 130/3 measuring 60 cents and survey no. 126/5 measuring 54 cents, totally measuring 2 acres 86 cents of Shivalli Village,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Udupi Taluk in the name of Ellapa Shetty, son of Suru Shetty.
17.5. As aforementioned, Anthu Shetty, Akku Shetty and Kukra Shetty expired without any legal heirs. Hence, it was Antu Shetty, Durgi Shetty and Timmappa Shetty who became the owners of the properties of the Aliya Santhana family, the present family being governed by 'Alia Santhana' law, being a matrilineal system. 17.6. A partition was entered into on 22.05.1990 and registered as document No.241/1990 between Sadashiva Shetty and Sundari Shetty, the other children of Antu Shetty, namely Bachcha Shetty and Ammani Shetty, were not made parties to the said partition.
17.7. Thereafter, Sadashiva Shetty on 24.12.1994 executed an agreement of sale of the properties which came to his share, namely survey No. 126/3 measuring 76 cents, 126/4 measuring 96
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR cents, 130/3 measuring 60 cents, 126/5 measuring 54 cents in favour of Vamana Baliga for a sum of Rs.8,20,000/- of which, a sum of Rs.5,00,000/- was paid on 24.12.1994, Rs.2,20,000/- was paid on 19.01.1995 and Rs.1,00,000/- was paid on 8.02.1995. Thus, he submits that the entire consideration agreed upon in the agreement of sale dated at 24.12.1994 had been paid by Vamana Baliga to Sadashiva Shetty during his lifetime. 17.8. He submits that Petitioner No.4-Suresh Shetty is also one of the witnesses to the agreement of sale and therefore is categorically aware of the agreement of sale, the rights created thereunder and the effect of the agreement of sale coupled with the power of attorney, which has been suppressed in the present proceedings.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 17.9. He submits that on 08.02.1995, a Will had also been executed by Sadashiva Shetty in respect of the aforesaid properties, bequeathing the properties to Vamana Baliga. There is no other Will subsequent to 08.02.1995, which has been placed on record indicating otherwise and or of Sadashiva Shetty having revoked the Will dated 08.02.1995. Thus, he submits that even under that Will, Vamana Baliga would be entitled to the properties as a legatee.
17.10. It is in pursuance thereof that on 14.02.1995, the subject GPA was executed by Sadashiva Shetty in favor of Vamana Baliga, wherein Vamana Baliga was provided with right to sell, mortgage, etc. This being so, for the reason that an agreement of sale had been executed, whereunder the entire consideration had been received, the sale deed could not be executed since it was within the prohibited period from
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR the date of the passing of the order of the Land Tribunal and it is in that background that a Will has been executed by Sadashiva Shetty in favour of Vamana Baliga, as also a power of attorney has been executed by Sadashiva Shetty in favor of Vamana Baliga. 17.11. The transaction was for Vamana Baliga to purchase the entire holding of the family and as such, Bachcha Shetty's wife Shusheela Shetty and her children, namely Pramila, Vidya, Santosh, Harish and Bharat, had on 13.03.1995 executed an agreement of sale of their properties in favor of Vamana Baliga for a consideration of Rs.3,60,000/-, out of which Rs.60,000/- was paid on 13.03.1995, Rs.1,00,000/- on 19.05.1995, Rs.90,000/- on 16.06.1995, Rs.1,10,000/- on 23.08.1995. Thus, the entire consideration of Rs.3,60,000/- had been paid in the year 1995 itself.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Thereafter, the said Susheela Shetty and her children executed a GPA in favour of Vamana Baliga on 26.04.2000, empowering him to sell, mortgage, etc., their properties. 17.12. Similarly, Ammanni Shetty and her children Sabita, Udaya, Anita, Sharada and Shantha executed an agreement of sale on 26.12.1994 to sell their property in favour of Vamana Baliga for a sum of Rs.7,50,000/- out of which an amount of Rs.1,00,000/- was paid on 26.12.1994, Rs.1,00,000/- on 13.01.1995, Rs.1,50,000/- on 06.09.1995, Rs.4,00,000/- on 13.06.1997. Thus, the entire sum of Rs.7,50,000/- had been paid by 1997. On 14.02.1996, a GPA was executed by Sabita and Shanta in favour of Vamana Baliga. Another power of attorney was executed on 14.02.1996 by Ammani, Udaya, Anita and Sharada in
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR favour of Vamana Baliga, empowering him to sell, mortgage, etc. 17.13. Sunanda Shetty had also executed an agreement of sale on 14.11.1997 on behalf of herself and her family to sell her right in the property for a sum of Rs.4,00,000/- which was paid on 04.11.1997 itself. A GPA came to be executed by Sunanda, Usha, Chandra, Vijaya, Pushpa, Sulochana in favour of Vamana Baliga on 26.4.2000 in respect of those properties authorising Vamana Baliga to sell mortgage, etc. 17.14. All these transactions were contemporaneous, which have not been brought to the knowledge of this Court by the Petitioners. Only document which has been placed on record by the petitioners is the power of attorney without referring to the agreement of sale and the Will
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR executed by Sadashiva Shetty in favor of Vamana Baliga.
17.15. The other agreements of sale and GPA executed by the other family members as regards the properties of the family, the receipt of valuable consideration of Rs.8,20,000/- by Sadashiva Shetty, Rs.3,60,000/- by Sushila Shetty and family, Rs.7,50,000/- by Ammani Shetty and her family, Rs.4,00,000/- by Sunanda Shetty and her family, he submits that the transactions having occurred in the years between 1994 to 1997, the entire family wanted to sell the property belonging to the family in favor of Vamana Baliga and as aforesaid it is only on account of the prohibitory period, post the order of the Land Tribunal that the sale deed could not be executed and registered and it is in that background, the power of attorney had been executed, the
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR property was put in possession of by Vamana Baliga.
17.16. His submission, therefore, is that the entire sale consideration having been received by the owners, the agreements of sale having been entered into and executed, so also powers of attorneys being executed, the powers of attorney is one coupled with interest and as such, the power of attornies being entitled to execute sale deeds, mortgage deeds, etc., there was no need to do so in the name of Sadashiva Shetty and others.
17.17. Vamana Baliga having all right, title and interest in the property, there was only a formal registration of sale deed which was required to be made. The family members having lost their right in the properties on execution of the agreement of sale, receipt of the entire consideration and handing over of
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR possession, had no subsisting right when a loan was borrowed by Vamana Baliga and others from Mangala, Janata/Abhyudaya. The agreement of sale, the power of attorney continues to be valid and binding between the parties and the same cannot be terminated. 17.18. He submitted that the claim of the Petitioner is hopelessly barred by limitation, delay and latches as also acquiescence.
17.19. In furtherance of the GPA which had been entered, executed, mutation entry was made in the RTCs which had MR No.302 of 2000-2001, way back on 1999-2000. The said RTC being a public document, being to the knowledge of one and all including the petitioners from the year 2000, neither Sadashiva Shetty nor the petitioners challenged the same or took any action.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 17.20. Firstly, therefore, there is an acquiescence on their part that the action taken by Vamana Baliga is as per the agreement of sale and power of attorney. Secondly, since no action has been taken from the year 2000, no action could be taken, challenging all these aspects. No suit could have been filed challenging all these aspects in the year 2009 nor could any appeal be filed in the years 2013-14 and revision petition in the year 2021. The appeal had been rejected in the year 2014, thus he submits that there is a delay at each stage. 17.21. The agreement of sale and GPA had been executed in the year 1995, loan had been availed in the year 2000, entries had been made in the RTCs in the year 2000, Proceedings had been initiated under the KCS Act in the year 2000-2001, Decree having been passed in the year 2003, Sale having been
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR confirmed in the year 2007, the suit was filed in the year 2009, an appeal was filed in the year 2013, which came to be dismissed on 13.02.2014.
17.22. Revision petition was filed on later, which came to be dismissed on 2.9.2021. Earlier writ petitions were filed on 14.12.2023, which was withdrawn on 5.8.2024 and the present writ petitions were filed on 17.9.2024. 17.23. His submission is that the purchaser has acted bonafide, has participated in auction conducted, has been declared as the highest bidder, and has made payments of the said amounts, therefore no fault can be found with the purchaser, nor can the purchaser's rights be sought to be challenged in the manner as done. The auction having been conducted publicly to the knowledge of one and all, the auction notice having been published in the daily newspaper,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR auction conducted on 11.03.2005, the suit was filed in the year 2009 after lapse of four years, the said suit is barred by Article 126, 128, 129 or under the Residuary Article 137 of the Limitation Act. The said Articles are reproduced hereunder for easy reference:
Sl. Description of Period of Time from No. suit limitation which period begins to run
126. For the payment Thirty The date of the of the amount of days. decree.
a decree by
instalments.
128. For possession by Thirty The date of the
one dispossessed days. dispossession.
of immovable
property and
disputing the
right of the
decree-holder or
purchaser at a
sale in execution
of a decree.
129. For possession Thirty The date of
after removing days. resistance or
resistance or obstruction.
obstruction to
delivery of
possession of
immovable
property decreed
or sold in
execution of a
decree.
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NC: 2025:KHC:44339
WP No. 27349 of 2024
C/W WP No. 28076 of 2024
HC-KAR
137. Any other Three When the right
application for years. to apply accrues.
which no period
of limitation is
provided
elsewhere in this
Division.
17.24. The said suit having been dismissed on
23.06.2012, RFA No. 1126 of 2016 was filed on 05.07.2016 which is after a lapse of 4 years from the date of judgement in OS No. 44 of 2009, which is barred by Article 116 of the Limitation Act, the said article is reproduced hereunder for easy reference:
Sl. Description of Period of Time from No. suit limitation which period begins to run 116 Under the Code of Civil Procedure, 1908 (5 of 1908)--
(a) to a High Court from any decree or order. Ninety Days Ninety days. The date of the decree The date of or order. the decree or order.
(b) to any other
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NC: 2025:KHC:44339
WP No. 27349 of 2024
C/W WP No. 28076 of 2024
HC-KAR
court from any Thirty Days
decree or order.
The date of
the decree
or order.
17.25. He submits that the sale confirmation dated 01.09.2005 was challenged before the Deputy Registrar Co-operative Societies, Udupi in appeal No. 5 of 2012-13 on 3.1.2013 after more than 7 years which is also barred by limitation. The revision petition in revision appeal No.31 of 2014 was dismissed on 02.09.2021. Earlier writ petition in WP No.129 of 2024 having been withdrawn, he submits that the entire proceedings which have been filed are only to harass the purchaser Sarika Shetty, who is a bona fide purchaser for value. 17.26. The Petitioners have been taking out frivolous paper publication as regards the developments
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR being carried out by her by way of a joint development agreement. Sarika Shetty had entered into a partnership with Jerry Vincent Dias and others in forming Mandavi infrastructure for construction of buildings, the launch ceremony took place on 2.3.2024, the partnership deed had been entered into on 13.7.2022, the aforesaid properties were brought in as capital by Sarika Shetty and a Mall has been constructed on the said property which has been sold to several persons who are in occupation of the same and carrying on their business.
17.27. The present petition was filed when the remaining property was sought to be developed as a residential apartment complex. Initially, an order of restraint from selling the property was passed by this court in WP 27349/2024, pursuant to which the petitioners published
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR various notifications in newspapers, totally Numbering 11 (eleven) trying to mislead the purchasers and threaten the purchasers with litigation.
17.28. Thus, he submits that the conduct of the petitioners has only been to harass the purchaser and the developers to try and force the purchaser and developers to accede to the unlawful demands of the Petitioners. This conduct of the Petitioners would disentitle them from any equitable consideration in the present writ petition.
17.29. He submits that one of the family members has not been made party to the present proceedings, namely Satish Sadashiva Shetty. As such, the present petition is defective for non-joinder or necessary parties. 17.30. His submission is that the loan has been availed of by Vamana Baliga in his personal capacity.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Vamana Baliga having rights in terms of the agreement of sale and power of attorney being entitled to mortgage the property has mortgaged the same. There is a separate memorandum of agreement which has been executed which has not been produced by the petitioners along with the petition, wherein Vamana Baliga has acted as an agent of Sadashiva Shetty and his family members. 17.31. There is suppression of material fact by the petitioners. Vamana Baliga being entitled to mortgage the properties under the power of attorney has exercised his rights and powers under the power of attorney in mortgaging the property by providing it as security to the loan borrowed by Vamana Baliga.
17.32. There is no requirement for the loan amount to have been credited to the account of Sadashiva Shetty. There is no such embargo under the
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR power of attorney. All these actions, having taken place long ago have not been challenged in time. The entries made in the RTCs have not been challenged. Vamana Baliga, being entitled to act on the power of attorney, having acted thereon, in the name of Sadashiva Shetty, the said power of attorney continuing to be in force, no fault can be found with the actions of Vamana Baliga.
17.33. He relies on Section 202 of the ICA 1872, which is reproduced hereunder for easy reference:
202. Termination of agency, where agent has an interest in subject-matter.--
Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. Illustrations
(a)A gives authority to B to sell A's land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR
(b)A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself out of the price the amount of his own advances. A cannot revoke this authority, nor is it terminated by his insanity or death. 17.34. By referring to Section 202, he submits that there is an agency, created in favour of Vamana Baliga which is coupled with interest, the entire consideration having been paid, Vamana Baliga having been put in possession, a power of attorney has been executed in his favour, the transaction is between the same parties under two or more documents, the power of attorney being coupled with interest, neither the agreement nor the power of attorney has been terminated, the action taken thereon cannot be questioned in the manner as done.
17.35. In this regard he relies upon the decision of the Hon'ble Apex Court in S.Chattanatha
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Karayalar -vs- The Central Bank of India Ltd.,4, more particularly, para no. 3 thereof which is reproduced hereunder for easy reference:
3. The first question presented for determination in this case is whether the status of the 3rd defendant in regard to be transaction of overdraft account is that of a surety or of a co-obligant. It was argued by Mr Desai on behalf of the appellant that the High Court has misconstrued the contents of Exs. A and B in holding that the 3rd defendant has undertaken the liability as a co-obligant. It was submitted that there was an integrated transaction constituted by the various documents -- Exs. A, B and G executed between the parties on the same day and the legal effect of the documents was to confer on the 3rd defendant the status of a surety an not of a co-obligant. In our opinion, the argument put forward on behalf of the appellant is well-founded and must be accepted as correct. It is true that in the promissory note -- Ex. B all the three defendants have "jointly and severally promised to pay Central Bank of India Ltd. or order a sum of Rs 4 lakhs only together with interest on such sum from this date", but the transaction between the parties is contained not merely in the promissory note
-- Ex. B -- but also in the letter of continuity dated November 26, 1946--Ex. A which was sent by the defendants to the plaintiff Bank along with promissory note -- Ex. B on the same date. Their is another document executed by Defendant 1 on November 26, 1946 -- Ex. G -- Hypothecation agreement. The principle is well established that if the transaction is contained in more than one document between the 4 AIR 1965 SC 1856
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR same parties they must be read and interpreted together and they have the same legal effect for all purposes as if they are one document. In Manks v. Whiteley [1912, 1 Ch 735 at p 754] Moulton, L.J. stated:
"Where several deeds form part of one transaction and are contemporaneously executed they have the same effect for all purposes such as are relevant to this case as if they were one deed. Each is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising out of the transaction as a whole."
It should be noted in the present case that the promissory note -- Ex. B -- was enclosed by the defendants along with the letter of continuity -- Ex. A before sending it to the plaintiff Bank. In the letter -- Ex. A it is clearly stated that the promissory note Ex. B was given to the plaintiff Bank "as security for the repayment of any overdraft to the extent of Rs 4,00,000". It is further stated in Ex. A that "the said promissory note is to be a security to you for the repayment of the ultimate balance or sum remaining unpaid on the overdraft". In the hypothecation agreement -- Ex. G it is stated that the plaintiff Bank has agreed to open a cash credit account to the extent of Rs 4 lakhs at the request of Cashew Products Corporation Ltd., Quilon. According to para 15 of the hypothecation agreement it operates as a security for the balance due to the plaintiff Bank on the cash credit account. Para 12 of the hypothecation agreement states that if the net sum realised be insufficient to cover the balance due to the plaintiff Bank, Defendant 1 should pay the balance of the account on production of a statement of account made out from the books of the bank as provided in the 14th clause. Under this clause Defendant 1 agreed to accept as conclusive
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR proof of the correctness of any sum claimed to be due from it to the bank a statement of account made out from the books of the Bank and signed by the Accountant or other duly authorised officer of the Bank without the production of any other document. If the language of the promissory note -- Ex. B is interpreted in the context of Exs. A & G it is manifest that the status of the 3rd defendant with regard to the transaction was that of a surety and not of a co- obligant. This conclusion is supported by letters -- Exs. AF dated November 27, 1947, AM dated December 17, 1947 in which the chief agent of the plaintiff Bank has addressed Defendant 3 as the "guarantor". There are similar letters of the plaintiff bank, namely, Exs. CE dated December 28, 1947, CG dated January 13, 1948, AS dated February 23, 1949, V dated October 21, 1949, III dated December 16, 1949, IV dated January 12, 1950 and 'O' dated March 29, 1950 in which Defendant 3 is referred to either as a "guarantor" or as having furnished a guarantee for the loan. Our concluded opinion, therefore, is that the status of the 3rd defendant with regard to the overdraft account was that of a surety and not of co-obligant and the finding of the High Court on this issue is not correct. 17.36. By relying on S.Chattanatha Karayalar's case, he submits that when a transaction is contained in more than one document between the same parties, they must be read and interpreted together as if they are one document. In that view of the matter, he
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR submits that Section 28 of the Negotiable Instruments Act would not be applicable. 17.37. On the basis of the above, he submits that both the writ petitions are required to be dismissed.
18. Ms.Lakshmi Iyengar, learned senior counsel, appearing for Respondent No. 6-Vamana Baliga, adopts the submission of Sri.Jayakumar S. Patil, learned senior counsel. She further submits that, 18.1. Under the strength of the power of attorney dated 01.04-1995, Vamana Baliga had on 31.03.2001 sold an extent of 10 cents in survey No. 126/4 to one Mr. Nagesh Nayak, which has not been challenged. What has been challenged is only the public auction which has been conducted. The fact that no challenge has been made to the said sale of 10 cents in survey No. 126/4 would indicate that the Petitioners have no grievance as regards the sale.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 18.2. She submits that a suit in OS No.155/2002 had been filed by Sundari Shetty against Sadashiva Shetty and Nagesh Nayak where the aforesaid sale in favour of Nagesh Nayak has been mentioned. During the pendency of the said suit, Sadashiva Shetty had expired and the legal heirs, who were the Petitioners herein except for Suresh Shetty, were brought on record on 1.4.2003.
18.3. Notices having been issued, Jayanti, Satish, Sureka and Jyoti did not appear. Suresh Shetty had appeared through a counsel, however, did not file his written statement. Thereafter, the suit came to be withdrawn on 21.07.2006. Thus, she submits that the petitioners being aware of the suit in OS No. 155 of 2002 did not appear in the said proceedings, one of them, Suresh Shetty, having appeared did not contest the same. The said Suresh Shetty is petitioner
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR No.4 in WP 28076/2024 and respondent No.4 in WP 27349/2024, thus, no contra stand can be taken by Suresh Shetty in these proceedings. 18.4. Vamana Baliga has acted in the interest of everyone concerned. The award and the auction in favour of Sarika Shetty having been challenged by him in an appeal which came to be allowed subject to condition of deposit of 5% of the award amount. Despite the best efforts of Vamana Baliga, he could not deposit such amounts resulting in the matter being proceeded with.
18.5. She submits that the decision relied upon by Sri.Ashok Haranahalli in Suraj Lamp and Industries Pvt. Ltd. Vs. State of Haryana and Ors5. is not applicable to the present case, the said judgment being rendered on 11.10.2011 is operative prospectively and not 5 AIR 2012 SC 206
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR retrospectively. The power of attorneys in the present matter having been executed between 1995 to 2000 would not come within the mischief of Suraj Lamp Industries's case and all the transactions which have been entered into prior to the said judgment are required to be considered to be valid between the parties. 18.6. She therefore submits that the writ petitions are required to be dismissed.
19. Sri.Ashok Haranahalli, learned senior counsel, in reply would submit that, 19.1. The Petitioners were not parties to suit in OS No.155/2002. Sundari Shetty, the plaintiff therein was represented by her power of attorney holder, Ratnakar Shetty. Sadashiva Shetty was stated to be represented by his power of attorney holder, Vamana Baliga. Sadashiva Shetty was not served with notice in the said proceedings. Even if it were to be
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR accepted that Petitioner No.4 had entered appearance through a counsel, such appearance had been made on 9.09.2003, the period of limitation could only be said to commence from 09.09.2003 and not the date of filing of the suit. The aspect of mortgage had not been mentioned anywhere until 2006 when Ratnakar Shetty acting as the power of attorney holder of Sundari Shedthi had withdrawn the suit. Thus, as on the date of withdrawal of the suit by filing of the above memo, the period of limitation could at the most be set to commence. The withdrawal being on 21.07.2006, the suit filed by the petitioners in OS No.44/2009 is within the period of limitation.
19.2. Petitioners have been diligent in following up and have taken all steps necessary by filing of the suit, by filing of an appeal and the revision
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR petition. The fraud coming to the notice of the petitioners only on the filing of the memo, he submits that there is no acquiescence on part of petitioner No.4 as being signatories to the agreement of sale.
19.3. His submission is that the agreement of sale and the Will, which had been produced, had not been produced at any point in time in any proceedings except in these proceedings. The originals of the said documents have also not been produced. He denies that Suresh Shetty has signed the same.
19.4. Insofar as the will is concerned, he submits that the Will refers to a loan transaction, not to a sale transaction, and the said Will cannot confer any right, title or interest on Vamana Baliga. He seeks to contend that the date of the sale, being 24.12.1994 was a Saturday, which is considered to be an inauspicious day among
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Gouda Saraswati Brahmins to which the petitioners belonged to, he submits that there is collusion between Ratnakar Shetty, who is the husband of Sarika Shetty and Vamana Baliga. All of them have sought to see to it that the property is purchased by Sarika Shetty to the detriment of the other family members, there being a dispute between the family members. Vamana Baliga has helped the other family members in not contesting the matter, not paying the amounts, bringing the property to auction and thereafter having sought to make feeble attempts at such challenge, has provided all the documents to Ratnakar Shetty and Sarika Shetty, which could never have been in their possession if not for Vamana Baliga giving them. Respondent No. 6 and 10, having contested OS No.155/2002, subsequently they have patched up their
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR disputes to cause detriment to the petitioners and as such, he submitted that malafides is on part of Respondent No.10 Sarika Shetty and her husband Ratnakar Shetty, which is clearly visible from the manner in which the transactions have been conducted. 19.5. His submission is that even if there is any right title or interest created in favour of the purchaser under an agreement of sale and power of attorney, the only action that could have been taken was to bring a suit for specific performance and get a sale deed executed in favor of Vamana Baliga instead of Vamana Baliga acting as the owner of the property. Thus, he again invokes the dicta laid down by the Hon'ble Apex Court in Suraj Lamp Industries case to contend that the transactions do not confer any right, title or interest on Vamana Baliga.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 19.6. As regards the Mall which has been constructed, he submits that the said Mall has not been constructed on the subject property but on a different property, and as such, the construction of the said Mall has not created any third-party rights.
19.7. What is in question is the residential apartments which are under construction, which have been so permitted to be constructed by this court subject to the result of the writ petition. As such, the same cannot be said to confer any equitable right on the respondents; the petitioners being entitled for the relief sought for, any construction which has been carried out by the respondents would enure to the benefit of the petitioners, since the said construction has been carried out having full knowledge of the pendency of the above proceedings.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 19.8. He therefore submits that the writ petitions are required to be allowed and the relief sought for granted.
20. Heard Sri. Ashok Haranahalli, learned Senior Counsel for the Petitioner, Sri. Jayakumar S. Patil, learned Senior Counsel, appearing for Respondent No.10- Sarika Shetty, the purchaser, Ms. Lakshmi Iyengar, learned Senior Counsel for Respondent No.6, Vamana Baliga.
21. After the matter was reserved for judgment, it was taken up for 'Being spoken to', on account of a new judgment passed by the Hon'ble Apex Court in Ramesh Chand (D) Thr. LRs. and others vs Suresh Chand and anr.,6.
22. Sri.Ajit Anand Shetty, learned counsel appearing for the petitioners, submitted that 22.1. In Ramesh Chand's case, Plaintiff claimed title over the suit property by virtue of four 6 Civil Appeal No.6377/2012 dated 1.9.2025
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR documents, namely general power of attorney, agreement to sell, affidavit, a receipt and a Will said to have been executed. Based on all of which, the plaintiff had sought for possession and declaration of title over the suit property against his other siblings.
22.2. Initially, the suit was decreed on the ground that the plaintiff had derived title over the suit property, which came to be confirmed by the Hon'ble High Court of Delhi in a Regular First Appeal.
22.3. In the Special Leave Petition, the Hon'ble Apex Court had remanded the matter to the High Court for fresh disposal in light of the law laid down in Suraj Lamp & Industries Pvt., Ltd., vs. State of Haryana7.
22.4. The Hon'ble Delhi High Court on remand, confirmed its earlier order, which was again challenged before the Hon'ble Apex Court. The 7 (2012) 1 SCC 656
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Hon'ble Apex Court held that an agreement of sale would not convey any title in favour of the beneficiary unless there is a conveyance. Under a power of attorney, the donee can only act for and on behalf of the donor, he cannot use the power of attorney for his own benefit. A mere power of attorney is not an instrument of transfer. A claim under a Will would have to be established in a court of law and the receipt would only acknowledge the receipt of the money and would not confer title. 22.5. He submitted that the said decision would help the petitioners inasmuch as acting under the power of attorney Vamana Baliga has borrowed a loan from a Cooperative Society of which Sadashiva Shetty was not a member nor was he a signatory to any loan document as a borrower or a guarantor. The amount advanced by the society has not been received by
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Sadashiva Shetty. The amount was received by Vamana Baliga and his associates which have been used by them for their own benefit. The power of attorney could not have been used for the own benefit of Vamana Baliga and his associates.
22.6. The mortgage which has been created in favour of the cooperative society is without any basis and as such illegal. Any further action including the auction which has taken place is again contrary to law and not binding on Sadashiva Shetty and his family members. He therefore submits that the recent decision of the Hon'ble Apex Court in Ramesh Chand's case helps the petitioners.
22.7. He also relies upon the decision of the Hon'ble Apex Court in the case M.S.Ananthamurthy
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR and anr vs. J.Manjula8, more particularly Paras 6, 7, 8, 16, 17, 18, 40, 46, 47, 48, 55 and 57, which are reproduced hereunder for easy reference.
6. It is the case of the appellants that on 04.04.1986, the Suit Property was sold by the original owner one A. Saraswathi (hereinafter referred to as "holder") for total sale consideration of Rs. 10, 250/- by executing an irrevocable power of attorney (hereinafter referred to as "POA") and an unregistered agreement to sell. The contents of the said POA and agreement to sell are extracted hereinbelow:--
"GENERAL POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT, I, Muniyappa urf Ruttappa Son of Ragallappa, Major, residing at Vajarahalli village, Uttarahalli Hobli, Bangalore South Taluk do hereby appoint, nominate and constitute Smt. A. Saraswathi W/O M. S. Anantha Murthy, residing at No. 155, 5th Cross, Wilsongarden, Bangalore - 560 027 as my General Power of Attorney holder to do the following acts, deeds and things on my behalf that is to say:
1) To look after, maintain, manage the Schedule Property in the best manner as my attorney deems fit.
2) To enter into any type of agreements in respect of the Schedule property with any person for any amount, receive advance amount, issue proper receipts, apply to the competent authority seeking permission to execute any type of deeds, in favour of any persons, and to execute such deeds in favour of such persons, receive full consideration amount, issue 8 Civil Appeal Nos.3266-3267/2025
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR proper discharge thereof, sign all deeds, forms etc., etc.,
3) To apply for transfer of Khata and to pay all future taxes and to receive proper receipts.
4) To apply for sanctioned plan for construction of any type of building on the property and to construct such building, utilise the same as my attorney deems fit and to get all profits therefrom.
5) To represent me in respect of the Schedule property in all Government offices, BDA, BWSSB, KEB, Corporation etc., etc., apply for any type of documents, receive the same, and approach BDA for reconvey of Schedule property, to pay all betterment charges and to do all connected things.
6) In case of complications to sue such matters in proper courts, of law by engaging the service of advocates or advocate, sign all forms, vakalath, suits, petitions, etc, produce any documents in court, take any documents from the court, give evidence, obtain decree, execute the sale or enter into compromise.
7) The Schedule property is in my peaceful possession and enjoyment thereof as absolute owner thereof.
8) My Attorney is ge11erally entitled to do all such acts, deeds and things, in respect of the Schedule property, which are not specifically written hereunder and I do hereby agree to ratify confirm all such acts, deeds and things done by my attorney as the acts, deeds and things done by me in person and this G.P.A. is irrevocable in nature.
SCHEDULE
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Site No. 10, out of Sy. No. 55/1, situated at Chunchaghatta Village, Uttarahalli Hobli, Bangalore South Taluk, measuring East to West 30 feet and North to South (40-6? + 42-3?)/2 feet and bounded as follows:--
East by: Property No. 11 West by: Property No. 9
North by: Road & South by: Private Property In witnesses whereof I the executant above named signed this General Power of Attorney on this 4th day of April 1986 at Bangalore.
Identified by me Executant Execution admitted before me S.B. Chandrasekhar Bangalore Metropolitan Area Notary Bangalore Date: 4-4-1986 SALE AGREEMENT This Deed of Sale Agreement is made on this 4th day of April, 1986 at Bangalore and executed by Sri. Muniyappa urf Ruttappa, Son of Ragallappa, residing at Chunchaghatta village, Uttarahalli Hobli, Bangalore South Taluk hereinafter called the "VENDOR" (which term shall mean and include all his heirs, executors, administrators and assignees) of the one part and in favour of Srimathi. A. Saraswathi W/O, th Ananthamurthy, residing at No. 155, 5 Cross, Wilson
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Garden, Bangalore-560 027 hereinafter called the "PURCHASER" (which term shall mean and include all heirs, executors, administrators and assignees) of the other part witnesseth as follows:--
WHEREAS the Vendor is the absolute owner in peaceful possession and enjoyment of the Schedule Property more fully described in the Schedule hereunder.
And whereas the Vendor is in need of funds for the maintenance of his family and other legal necessities he desired to sell the Schedule Property in favour of the purchaser for a sum of Rs. 10,250/- (Rs. Ten thousand two hundred fifty only) to which the Purchaser duly agreed to purchase the same for the said sum of Rs. 10,250/- only. In pursuance of this Sale agreement the purchaser paid a sum of Rs. 5,000/- on 20-5-1985 through a Cheque No. 0861556 of Syndicate Bank, Wilsongarden Branch, Bangalore and a sum of Rs. 5,250/- only Cheque No. 039 529/243 dated 3.4.86 of Syndicate Bank Wilson Garden, Bangalore total the Vendor received the full sale consideration of Rs. 10,250/- only. This day the Vendor handed over the vacant possession of the Schedule property to the purchaser to have and to hold the same as absolute owner. As there is a prohibition of selling the revenue sites by the Government of Karnataka the Vendor could not execute the sale deed. As and when the Government of Karnataka revokes the fragmentation act the Vendor execute the sale deed.
This day the Vendor handed over the vacant possession of the Schedule property to the purchaser, the Vendor have no objection to construct a dwelling house on the Schedule property the Vendor have no objection to transfer the Khata of the Schedule Property to the name of the purchaser.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR The Vendor assures the purchaser that the schedule property is free from all kinds of encumbrances and it is free from all taxes.
SCHEDULE:- Site No. 10, out of Sy. No. 55/1, situated at Chunchaghatta Village, Uttarahalli Hobli, Bangalore South Taluk, measuring East to West 30 feet and North to South (40-6? + 42-3?)/2 feet and bounded as follows:--East by: Property No. 11 West by: Property No. 9
North by: Road & South by: Private Property In witnesses whereof both the parties have affixed their signatures to this sale agreement on the day, month and the year above first written.
WITNESSES:
1.
2.
3.
VENDOR PURCHASER"
7. On the same day, the said POA was duly notarized. On 30.01.1997, the original owner, executant of the POA died. On 01.04.1998, the holder of POA executed a registered sale deed with respect to the Suit Property in favour of her son, i.e., the appellant no. 2, in exchange of sale consideration of Rs. 84,000/-.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR
8. On the other hand, several years after the death of the original owner, his legal heirs through a registered sale deed dated 21.03.2003 sold the same Suit Property to the respondent no. 7 for total sale consideration of Rs. 76,000/-. Subsequently, respondent no. 7 sold the Suit Property to the respondent no. 8 vide another registered sale deed dated 29.09.2003 for total sale consideration of Rs. 90,000/-. Then, on 06.12.2004, the respondent no. 8 executed a registered gift deed in favour of her daughter, i.e., the answering respondent.
16. Ms. Farhat Jahan Rehmani, the learned counsel appearing for the appellants submitted that the present case relates to the scope, interpretation and construction of the POA and the agreement to sell dated 04.04.1986 executed by the original owner in favour of holder. Hence, the limited question for our determination is whether the POA, which was coupled with interest is irrevocable as per Section 202 of the Contract Act or it stood terminated upon the death of the original owner as per Section 201 of the Contract Act?
17. Ms. Rehmani submitted that the fact of execution of the POA and the agreement to sell in favour of the holder by the original owner in exchange of sale consideration is not disputed. Since both the POA and the agreement to sell are in favour of the same person, they should be read together and construed harmoniously. The holder of POA executed the registered sale deed dated 01.04.1998 in favour of the appellant no. 2. Further, there is no challenge to the validity of the GPA and agreement to sell dated 04.04.1986 and the registered sale deed dated 01.04.1998. The GPA specifies that it had been executed for the purpose of the Suit Property. It specifically mentions that it is 'irrevocable' and the schedule to the GPA references the particulars of the Suit Property. The GPA read with the agreement to sell
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR would indicate that it had been executed for a valid sale consideration, and possession of the Suit Property was also delivered to the holder of POA. Thus, she had an interest in the subject-matter of the agency being irrevocable. By placing reliance on Section 202 of the Contract Act, he submitted that where the agent himself has interest in the property which forms a subject-matter of the agency, the agency cannot be terminated to the prejudice of such interest of the agent. In the facts of the case, Section 202 of the Contract Act is applicable and not Section 201.
18. It was further submitted that the High Court erred in holding that the purpose for which the GPA and the agreement to sell was executed was not mentioned in either of the documents and therefore, even though the two documents are contemporaneous yet it cannot be inferred that the holder of the two documents would derive an interest in the subject-matter of the GPA. Ms. Rehmani asserted that it has to be inferred that the original owner executed the agreement to sell as a consequence of executing the GPA in favour of the holder, hence, the said POA is not irrevocable merely for the reason that in the said documents the purpose for executing the GPA and agreement to sell has not been mentioned.
40. In the present case, it is evident from para 1 of the GPA executed by the original owner in favor of the holder that the POA was to look after, maintain, manage the Scheduled Property. Para 2 states that the attorney can enter into any agreement with any person with respect to the Scheduled Property for any amount, receive advance amount, to execute deeds in favor of such persons, issue proper discharge. Para 3 states that attorney has the power to apply for transfer of khata and to pay all future taxes and receive receipts. Further, para 4 states that the attorney can apply for sanctioning of plan for the purpose of construction, utilize the Scheduled Property as the
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR holder deems fit and receive all profits therefrom. Para 5 states that the attorney has the power to represent the holder in all Government Offices and do all things connected. Para 6 states that the attorney can pursue matters in courts, give evidence, obtain decree, execute the same. Further, para 7 states that the Scheduled Property is in owner's peaceful possession and enjoyment. Lastly, para 8 states that the attorney is generally entitled to do all acts required in respect of the Suit Property which are not specifically mentioned and that the GPA is irrevocable.
46. Applying the above exposition of law in the facts of the present case, it is evident from the tenor of POA that is not irrevocable as it was not executed to effectuate security or to secure interest of the agent. The holder of POA could not be said to have an interest in the subject-matter of the agency and mere use of the word 'irrevocable' in a POA would not make the POA irrevocable. The High Court was right in holding that the holder did not have any interest in the POA. When the High Court observes that the power of attorney does not explicitly state the reason for its execution, it implies that its nature is general rather than special.
47. It is a settled law that a transfer of immovable property by way of sale can only be by a deed of conveyance. An agreement to sell is not a conveyance. It is not a document of title or a deed of transfer of deed of transfer of property and does not confer ownership right or title. In Suraj Lamp (supra) this Court had reiterated that an agreement to sell does not meet the requirements of Sections 54 and 55 of the TPA to effectuate a 'transfer'.
48. From the independent reading of the POA and the agreement to sell, the submissions of the appellants fail on two grounds, first, the POA is general in nature and does not secure agent's right in the subject-matter
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR of the agency, and secondly, an agreement to sell simpliciter does not confer ownership in the immovable property so as to transfer a better title to anyone else.
55. The High Court rightly held that even though the GPA and the agreement to sell were contemporaneous documents executed by the original owner in favour of the holder, this alone cannot be a factor to reach the conclusion that she had an interest in the POA. Thus, even though the GPA and the agreement to sell were contemporaneous documents executed by the original owner in favour of the same beneficiary, this cannot be the sole factor to conclude that she had an interest in the subject-matter. Even if such an argument were to persuade this Court, the document must have been registered as per Section 17(1)(b) of the Registration Act. In the absence of such registration, it would not be open for the holder of the POA to content that she had a valid right, title and interest in the immovable property to execute the registered sale deed in favour of appellant no. 2.
57. The appellants submitted that the answering respondent had not challenged the validity of the GPA and the agreement to sell dated 04.04.1986 executed in favour of the holder and registered sale deed dated 01.04.1998 executed in favour of appellant no. 2. The appellants' submission does not hold good, as the absence of a separate suit for declaration or even a specific prayer to that effect does not alter the legal position of either party in the facts of this case. The legal standing of both parties remains unaffected, for want of a distinct challenge to the instruments in question.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 22.8. By relying on Ananthamurthy's case, he submits that, in that case, an unregistered agreement to sell and a power of attorney was executed. Subsequently, the original owner having expired, the power of attorney who executed a registered sale deed in favour of her son. The legal heirs of the original owner sold the property to one other person under a registered sale deed, who in turn executed a gift deed in favour of his daughter. It is in that background that the daughter had filed a suit in OS No.133/2007 for a permanent injunction against the earlier purchasers from interfering with her possession. The earlier purchasers had filed a suit in OS No.4045/2008, against the legal heirs of the original owner and the subsequent purchaser, as also the daughter for a declaration that the sale deeds and the gift
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR deeds are null and void. Both the suits were consolidated and tried together. 22.9. The trial court vide its judgment decreed the suit in O.S.No.133/2007 and dismissed the suit in O.S.No.4045/2008. Aggrieved by the same, a first appeal was filed before the High Court. The Hon'ble High Court of Karnataka dismissed the appeal on the ground that the earlier purchasers had not disputed the sale deeds and the gift deeds in the suit filed by the daughter. The earlier purchasers had admitted that the original owner had expired on 30.1.1997 and it is subsequently that a registered sale deed came to be executed by the power of attorney. 22.10. This High Court came to the conclusion that though the General Power of Attorney and agreement to sell were executed by the same executor on the same day, yet they could not be treated as a single transaction since the
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR General Power of Attorney did not make any mention of the agreement of sale. The execution of an irrevocable power of attorney and an agreement to sell does not automatically transfer any right or interest to the beneficiary. The holder of the power of attorney and an agreement to sell did not enforce the same against the legal representatives of the executed, but made use of the power of attorney to transfer the property on his own. In that background, this Court held that Section 202 of the Contract Act would not be applicable. Lastly, this Court held that the aspect of limitation would be covered under Article 65, providing 12 years' time to sue. It is the judgment of this Court, which was challenged before the Hon'ble Apex Court in the aforesaid matter.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 22.11. The Hon'ble Apex Court vide the aforesaid judgment held that a transfer of immovable property by way of sale can only be by a deed of conveyance and agreement to sell is not a conveyance. The power of attorney not having made a mention of the agreement to sell was a general power of attorney and as such could not be said to be irrevocable and in that background came to a conclusion that the General Power of Attorney and agreement to sell could not, having been executed on the same day, being contemporaneous documents, cannot be a sole factor to conclude that an interest was created in the said property unless a sale deed was registered in terms of Section 17 (1)(b) of the Registration Act and dismissed the appeal which had been filed. 22.12. By relying on both the judgments of the Hon'ble Apex Court in Ramesh Chand and
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Ananthamurthy's cases, Sri.Ajit Shetty, learned counsel for the petitioners would submit that the agreement of sell executed by Sadashiva Shetty as also the power of attorney would not create any irrevocable interest in favour of Vamana Baliga and his associates, and as such the writ petitions are required to be allowed.
23. Sri.Rajesh Shettigar, learned counsel for Respondent No.10 would submit that:
23.1. The power of attorney specifically confers power on Vamana Baliga to execute any document in favour of any person and to receive consideration and register documents as also to complete the process, to pledge, mortgage, sell, exchange the scheduled property and raise amount on charge of the property from any individuals, persons, firms, banks, either nationalized or private scheduled
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR banks, cooperative societies, financial institutions or from any other firms to invest any amount in the property and improve the same, etc. 23.2. Similar power of attorneys were executed by the other family members as earlier submitted. The agreement of sale specifically makes a mention of the intention to sell and or the difficulty / impediment in getting the sale deed registered immediately. The handing over of the original documents pertaining to the property and the receipts which was subsequently issued evidences that the entire consideration has been paid to the family of Sadashiva Shetty. Similarly, under other agreements and power of attorneys, a similar statement has been made and acknowledgement made under the receipt of the entire consideration.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 23.3. There is no amount which is due and payable to the family of Sadashiva Shetty and or any other family members and hence, he submits that the agreement of sale evidences the intention to sell the receipts, which evidence the receipt of the entire consideration. The power of attorney clearly and categorically authorises the donee to mortgage the properties, in pursuance of which, a mortgage was effected in favour of Mangala and Janatha.
23.4. The loan amount not being paid by the power of attorney, the same was brought to sale by way of auction, where Respondent No.10 has purchased the same. The auction which has been conducted, has been so conducted in a proper manner. The Petitioners cannot challenge the said auction in the manner as done, having failed in all earlier proceedings,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR and those proceedings have been filed belatedly.
23.5. The decisions in Ramesh Chand and Ananthamurthy's cases would not be applicable in the present matter, since that was a sale executed under the power of attorney voluntarily by the parties. In the present matter, a mortgage having been affected, a charge having been created on the property, the property was brought to sale in pursuance of an order of the DRCS passed under the KCS Act, 1959. Hence, those decisions would not be applicable to the present matter. 23.6. He relies upon another recent judgment of the Hon'ble Apex Court, in the case of Dastagirisab vs. Sharanappa @ Shivasharanappa Police Patil (D) by LRs and others., more particularly, Paras 12, 16
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR and 18 thereof, which are reproduced hereunder for easy reference:
12. Plaintiff-coparcener has assailed the sale transaction undertaken by 1st defendant-Karta on the ground it was not made for legal necessity but to meet his expensive and wasteful habits. Evidence has come on record 1st defendant-Karta had previously sold various properties of the HUF. Though it is the plaintiff's case that such sales were not for legal necessities, he has not challenged any of these transactions. To justify his present claim, the plaintiff asserts the 1st defendant assured him money derived from such sales would be settled in favour of the sons including the plaintiff and that no other properties would be sold. It is further the plaintiff's case, no money was settled in his favour or that of the 2nd defendant but substantial sums were settled in favour of 3rd and 4th defendant. Though the plaintiff alleges 1st defendant acted in a biased and unfair manner, admittedly the plaintiff has not taken any steps for recovery of such outstanding dues earlier or even in the present suit.
16. High Court held as 5th defendant had not made enquiries regarding the source of title or the manner in which the sale consideration was distributed among coparceners, hence he cannot be held to be a bona fide purchaser. We are conscious that the onus to prove that a sale made by the Karta on behalf of other coparceners of HUF for legal necessity lies on the alienee/purchaser11. The 5th defendant-purchaser, through deft cross examination of the plaintiff and other evidence, has established a clear nexus between the sale transaction and the expenses undertaken for Kashibai's marriage and has thereby discharged the onus. In these circumstances, his case cannot be disbelieved on the score that all the coparceners had not received the sale consideration. This fact Page 12 of 13 is in the special knowledge of the plaintiff and other coparceners. Onus of proof on the stranger-
purchaser cannot run counter to the principle of
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR reverse burden enshrined in Section 106 of the Evidence Act, 1872 and saddle him with the liability to prove facts which are within the special knowledge of the coparceners of the HUF.
18. On the contrary, conduct of the plaintiff in belatedly challenging the sale transaction after five years in the year 2000 raises grave doubt regarding his bona fides. Plaintiff sought to justify the delay by contending he was unaware of the sale since possession of the suit land was not parted with. Such explanation is wholly facetious as ample evidence in the form of mutation certificate, land record entries standing in the name of 5th defendant have come on record establishing his continued possession of the suit land. High Court not only ignored these facts improbabilising the plaintiff's case but made up a third case that the plaintiff was working for gain elsewhere and could not have been aware of the sale transaction. No such case was either pleaded or probabilised by the plaintiff during trial.
23.7. By relying on Dastagirisab's case, his submission is that a sale agreement, along with a power of attorney having been executed by the Kartha of the family, the entire sale consideration having been received by the Kartha and the sale being affected on the ground of legal necessity, the transactions
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR which have been entered into pursuant thereto are all valid.
23.8. In the present matter the entire sale consideration has been paid. There is no other claim that Sadashiva Shetty and or his legal heirs, that is the petitioners, can have as regards the property. All obligations on the part of Vamana Baliga having been discharged, and the power of attorney authorising the donee to mortgage the property, the actions taken by Vamana Baliga are proper and correct. On these grounds he submits that the writ petitions are required to be dismissed.
24. Further heard Sri.Ajit Shetty, learned counsel for the petitioners and Sri.Rajesh Shettigara, learned counsel for Respondent No.10.
25. The points that would arise for the consideration of this Court are:
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR I. POINTS RELATING TO AUTHORITY, MORTGAGE, AND AGENCY
1. Whether the Power of Attorney (PoA) holder, Vamana Baliga, had the legal authority to mortgage the properties of Sadashiva Shetty?
2. Whether the mortgage executed by the PoA holder without express authority from the principal (Sadashiva Shetty) is void ab initio?
3. Whether there existed a valid principal-
agent relationship between Sadashiva Shetty and Vamana Baliga under Section 182 of the Indian Contract Act, 1872?
4. Can a PoA be construed as a document coupled with interest in view of the alleged agreement of sale and the Will executed by Sadashiva Shetty?
5. Does the execution of promissory notes and loan documents by the borrowers (who were not the owners of the property) create any enforceable right against the property of Sadashiva Shetty?
6. Whether the banks/cooperative societies were negligent or complicit in accepting a mortgage from persons who had no ownership or title in the properties? II. POINTS RELATING TO THE VALIDITY OF THE SALE AND AUCTION PROCESS
7. Whether the auction sales dated 15.12.2004 (Mangala Society) and 20.09.2007 (Janatha Society) and their
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR confirmations are valid and legally sustainable?
8. Whether the execution proceedings under the Karnataka Co-operative Societies Rules, 1960, were conducted in compliance with Rule 34?
9. Whether the purchasers derived any valid title to the properties through the execution sale?
III POINTS RELATING TO COMPLIANCE WITH THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959
10. Whether Section 60 of the KCS Act prohibits loans to non-members, and if so, whether the loans in question are contrary to the Act?
11. Whether the provisions of Section 33 (regarding the charge on the land of members) were complied with by the borrowing parties and the societies?
12. Whether the appellate and revisional authorities under Sections 101 and 108 of the KCS Act failed to consider the legal infirmities in the underlying mortgage and auction proceedings?
IV. POINT RELATING TO LIMITATION, DELAY AND ACQUIESCENCE
13. Is the challenge to the awards, auction sales, sale confirmations, and orders of the appellate/revisional authorities barred by limitation?
14. What order?
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26. I answer the above points as under:-
27. Answer to Point No.1: Whether the Power of Attorney (PoA) holder, Vamana Baliga, had the legal authority to mortgage the properties of Sadashiva ShettY?
27.1. The power of attorney executed by Sadashiva Shetty in favour of Vamana Baliga reads as:
GENERAL FOWER OF ATTORNEY.
Know ALL MEN BY TIESE PRESENS THAT, I, SADASHIVA SHETTY aged about 55 years son of Anthu Sheathy, Agriculturist, and residing at kunjibetty of Udupl taluk, hereby make my Power of Attorney as follows:
WHEREAS I am in Possession and enjoyment of the immoveable Properties more fully described in schedule 'n' hereto which were allotted to my share under the terms and conditions of a Partition Deed entered into between me and my relative Sunanda Shedthi, dated 22.5.1990. Now I am in effective management of the property.
AND. WHEREAS I am now residing at Surat in connection with my Hotel Business and I am not in a position to manage the properties effectively and efficiently. Therefore, I have decided to appoint, an attorney for the said purpose and also requested our well-wisher Sri (K. Vamana Baliga) Son of Sri Gopala Krishna Baliga, Proprietor, Dwadashi Hotel. Kalganka for the same.
Whereby virtue of this deed, I appoint, nominate and constitute and had appointed, nominated and
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR constituted the K. Vaman Baliga son of Shri. Gopal Krishan Baliga in the following other matters viz.
1. To appear before all Civil. Criminal and Revenue Courts either original. revisional or Appellate including High Court of Karnataka at Bangalore and to file Suits or any other cases, petitions in respect of the Schedule properties on my behalf or to defend any cases and to do all required deed acts and things including appointment of Advocates, Pleaders or other attorneys on my behalf.
2. To appear before the Sub-Registrar's Office and execute any documents in favour of any persons and to receive consideration and register the documents and also complete the process.
3. To pledge, mortgage, sell, exchange the "A' schedule and raise amount on the charge of 'A' schedule from any Individuals, persons, firms, Banks, either nationalized or Private schedule Banes, Co-
operative Societies, Financial institutes or from any other firms as my attorney thinks proper to do so.
4. To invest any amount in 'A' schedule and: improve the same and also to construct any constructions.
5. To apply for permission or License for any construction in 'A' schedule from Town Municipality, Panchayath offices, Town Planning Authority or any other offices.
6. To appear before any Private or Public Offices or behalf and to do all acts, deeds and things.
7. And generally, to do all acts, deeds and things that are required to be done in the matter.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR
8. To apply for conversion of A schedule and to do all acts, deeds and things required to be done in this behalf on my behalf and complete the work. I hereby agreed and ratify and confirm all such lawful acts of ou attorney as if they were done by me personally by virtue of this deed.
A Schedule Immovable properties situated in shivally village Udupi taluk with Udupi town municipality.
S.No S.D Kissam Extent Asst
130 3 Nanja 0.60 5.67
126 4 " 0.96 9.67
27.2. A reading of the power of attorney by itself, would indicate that under the power of attorney, the donee has the right to pledge, mortgage, sell, exchange the 'A' scheduled property and raise amount on the charge of 'A' scheduled from any individuals, persons, firms, banks, either nationalized or private scheduled banks, cooperative societies, financial institutions or from any other firms as the
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR attorney thinks proper to do so. The power of attorney clearly and categorically mandates that it can pledge, mortgage, sell, or exchange the property, with no restrictions in this regard. 27.3. On the very reading of the power of attorney, I have no doubt in answering Point No.1 by holding that the power of attorney holder Vamana Baliga had the legal authority to mortgage the properties of Sadashiv Shetty.
28. Answer to Point No.2: Whether the mortgage executed by the PoA holder without express authority from the principal (Sadashiva Shetty) is void ab initio?
28.1. It has been sought to be contended by Sri.Ashok Haranahalli, learned Senior Counsel for the Petitioners that the mortgage required the express authority from Sadashiva Shetty. There being no such authority, the mortgage is void ab initio. Apart therefrom, it was contended that even if a mortgage were to be
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR created and amounts raised, those amounts had to be credited to the account of Sadashiva Shetty. The amounts having been received by Vamana Baliga and not by Sadashiva Shetty cannot be said to be in pursuance of the power of attorney and in this regard, reference has been laid on Section 58 of the Transfer of Property Act to contend that Vamana Baliga did not have any power to mortgage the property, since he did not have an interest in the property, at the most, he could only be an agreement holder.
28.2. Though at first blush this argument sounds convincing, what would have to be considered is that this argument has been addressed in isolation without referring to the contemporaneous transactions entered into by other family members. As submitted by Sri.Jayakumar S.Patil, learned senior counsel,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Sadashiva Shetty for the purpose of sale of his share in the property received a sum of Rs.8,20,000/-, Sushila Shetty and her family received a sum of Rs.3,60,000/-, Ammani Shetty and her family received a sum of Rs.7,50,000/-, Sunanda Shetty received a sum of Rs. 4,00,000/-.
28.3. What is more important is that all these persons had executed similar agreement of sale as well as a power of attorney in favour of Vamana Baliga. That is, it is not only Sadashiv Shetty but all the other family members who had executed agreements of sale, powers of attorney as well as issued receipts for having received the consideration.
28.4. The entire consideration having been received by Sadashiva Shetty, even as per the agreement of sale, there were impediments in execution of a sale deed, but for those
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR impediments, a sale deed would have been executed. This would clearly and categorically indicate that the entire sale consideration having been received by Sadashiva Shetty, on a mortgage being created of the property as authorised under the power of attorney, there is no requirement for any monies to be made available to Sadashiva Shetty as sought to be contended. Which would amount to Sadashiva Shetty receiving more than the value of the property, which he had already received. 28.5. It would also amount to grant of a premium on the actions of Sadashiva Shetty and his family who have ex facie acted dishonestly inasmuch as Sadashiv Shetty as the father having executed an agreement of sale, power of attorney, having received the entire consideration, the wife and children cannot
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR later contend that there is no power for Vamana Baliga to mortgage the property. 28.6. Hence, I answer Point No.2 by holding that the mortgage executed by the power of attorney holder, Vamana Baliga is proper and correct and within the scope of his powers.
29. Answer to Point No.3: Whether there existed a valid principal-agent relationship between Sadashiva Shetty and Vamana Baliga under Section 182 of the Indian Contract Act, 1872? 29.1. Reference has been made to Section 182 of the Indian Contract Act to contend that an 'agent' is a person employed to do any act for another or to represent another in dealings with third person. On that basis, it is submitted that the mortgage which has been executed by Vamana Baliga was so done in his own name and therefore not as an agent of Sadashiva Shetty under the power of attorney.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 29.2. Insofar as the mortgage is concerned, the submission made is that the mortgage being executed in the individual name of Vamana Baliga and not as the power of attorney cannot bind Sadashiva Shetty since the agent himself has not adverted to the principal-agent relationship.
29.3. By referring to Section 28 of the Negotiable Instruments Act 1881, submission made is that if an agent were to execute a document on his own, then he would be personally liable on the instrument. The principal cannot be made liable. References is also made to Section 230 of the Indian Contract Act to contend that the agent cannot personally enforce nor be bound by contracts on behalf of the principal. The said protection under Section 230 would be available only to an agent who has disclosed the name of the principal.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 29.4. In the present case, Vamana Baliga having executed a mortgage in his own name and as also in the name of his associates, it's a personal mortgage executed by Vamana Baliga as regards which Sadashiva Shetty and or his family members would not be liable. Reference is also made to Bharati Cellular's case to contend that agent acts in a fiduciary capacity and is required to act in the name of the principal. Vamana Baliga not having executed the mortgage in the name of Sadashiva Shetty, Sadashiva Shetty or his family members, are not bound by it. Again, reference has also been made for a similar purpose on the decision of the Hon'ble Madras High Court in Sivagurunatha Pillai's case.
29.5. These contentions would have to be considered in the context of the matter. The context having already been stated hereinabove,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Sadashiva Shetty and his other family members had entered into multiple agreements of sale, multiple powers of attorney were issued in favour of Vamana Baliga, and the family had received the entire consideration. Under each of the powers of attorney which had been executed, Vamana Baliga was permitted to create a mortgage, receive monies etc., as indicated supra.
29.6. This would have to be, read in juxtaposition to Section 202 of the Indian Contract Act, 1872 (ICA), which provides for an agent who himself has an interest in the property which forms the subject matter of the agency. In the present matter, Vamana Baliga having made payment of the entire consideration to Sadashiva Shetty and his other family members, having been put in possession of the property, there being an agreement of sale and a power of attorney
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR which has been executed; under the power of attorney, Vamana Baliga being authorized to mortgage the property, the action taken by Vamana Baliga, though could have been in the name of Sadashiva Shetty, the fact still remains that the family of Sadashiva Shetty has received the entire consideration and thereafter has no role to play or no rights which are subsisting in the said properties, except for a formal execution and registeration of a Sale Deed which also has been authorised under the powers of Attorney.
29.7. If the context is not considered and law applied, I am afraid there could be injustice which could be done to the bona fide purchasers who have purchased the property in an auction proceeding. What would also have to be seen is that there was an impediment in execution of a registered sale deed and it is for that reason
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR that in the agreement of sale, it has been stated that an agreement of sale is being executed. Only under an agreement of sale or a power of attorney, no purchaser would have paid the entire consideration as has been paid in the present matter nor would the owner hand over the possession as also the original title documents.
29.8. The terms of the powers of attorney have been extracted hereinabove, similar being the terms of the power of attorney executed by other family members in favour of Vamana Baliga, I answer point No.3 by holding that there existed a valid principal agent relationship between Sadashiva Shetty and Vamana Baliga under Section 182 of the ICA and the non-naming of Sadashiva Shetty in the mortgage document would not have any adverse effect on the exercise of the rights by Vamana Baliga.
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30. Answer to Point No.4: Can a PoA be construed as a document coupled with interest in view of the alleged agreement of sale and the Will executed by Sadashiva Shetty?
30.1. This point has been specifically framed, though there is an overlap with other points, to specifically answer the issue of Vamana Baliga's agency being one coupled with interest. 30.2. As indicated supra, Section 202 of the ICA provides for, an agent who himself has an interest in the property which forms the subject matter of the agency. In the present matter, the agency is created under the power of attorney and the subject matter of the power of attorney is the property, which is also the subject matter of an agreement of sale. 30.3. The contention of Sri.Ashok Haranahalli, learned senior counsel in this regard is twofold. Firstly, that the agreement of sale and power of attorney by itself do not make the agency coupled with interest. Secondly, the action
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR taken by Vamana Baliga in his own name and not on behalf of the principal cannot be brought under the purview of Section 202 of ICA. 30.4. Both these arguments, I am afraid, cannot be accepted, again for the simple reason that Sadashiva Shetty had executed the agreement of sale and power of attorney during his lifetime and had received the entire sale consideration. Similarly, the other family members have also executed similar agreements of sale and powers of attorney and received the entire consideration. None of those other family members has challenged the actions taken by Vamana Baliga in mortgaging the property, except the family of Sadashiva Shetty. 30.5. This would again indicate the context in which these documents have been executed and the rights conferred under those documents by the other family members on Vamana Baliga. The
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR agreement of sale makes it clear that the property is to be sold. The impediment in the execution of a sale deed is contained therein. 30.6. A power of attorney having been contemporaneously executed authorising the agreement holder to mortgage, deal with, or sell the property.
30.7. The entire consideration under the agreement of sale having been received by the agreement holder, I am of the considered opinion that the decisions in Ramesh Chand and Ananthmurthy would not be applicable. In both those cases, the power of attorney had executed a document. In Ramesh Chand case, sale deed came to be executed in pursuance of the power of attorney and it is in that background that the Hon'ble Apex Court was considering the aspect of whether the agreement of sale and power of attorney by
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR itself confer any title on the agreement holder and the Hon'ble Apex Court came to a conclusion that they do not.
30.8. In Ananthamurthy's case, the sale deed was executed after the death of the executor of the agreement of sale and power of attorney. Again, the issue raised in that matter was as regards whether the agreement of sale and power of attorney by itself transfer the property. The Hon'ble Apex Court in both the matters has categorically held that a mere agreement of sale with the power of attorney would not convey any title and would not act as a conveyance. The Hon'ble Apex Court in Ananthamurthy's case has also held that execution of the agreement of sale and power of attorney contemporaneously cannot be a sole factor to determine whether there is an agency coupled with interest.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 30.9. The facts in the present matter are completely different and as indicated in all the answers above, the entire family of Sadashiva Shetty including his, aunts, sisters, uncles etc had executed agreements of sale and powers of attorney in favour of Vamana Baliga. It is these factors if taken into consideration with the further factor that there was an impediment to execute a sale deed would categorically and unimpeachably establish that multiple agreements of sale were executed by the family members of Sadashiva Shetty in favour of Vamana Baliga. Each of them had also executed powers of attorney in favour of Vamana Baliga and all of them had received the entire sale consideration.
30.10. Thus, when the entire sale consideration has been received, the question of making payment of any monies to Sadashiva Shetty, as claimed
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR by the petitioner, would not arise. The power of attorney, along with the agreement of sale, by way of grant of possession, handover of original title documents and receipt of the entire sale consideration, contemporaneous with other agreement of sale by the other family members, in my considered opinion, has created an agency coupled with interest in favour of Vamana Baliga.
30.11. Hence, I answer Point No.4 by holding that the present power of attorney executed by Sadashiv Shetty in favour of Vamana Baliga is one coupled with interest not only in view of the agreement of sale and the Will executed but also on account of possession and original title documents having been handed over, the entire consideration having been received as also all other family members having executed similar agreement of sale and power of attorney,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR handed over possession, and received the entire consideration.
31. Answer to Point No.5: Does the execution of promissory notes and loan documents by the borrowers (who were not the owners of the property) create any enforceable right against the property of Sadashiva Shetty? 31.1. The submission of Sri.Ashok Haranahalli, learned senior counsel, is that the promissory note and the mortgage document have been executed by Vamana Baliga and his associates in their individual capacity. Sadashiva Shetty is not a member of the Co-operative Society as also no amount has been received by Sadashiva Shetty under the said loan transaction. Therefore, the same would not create any enforceable right against the property of Sadashiva Shetty. All these aspects have been dealt with in respect of the above points and I have come to the conclusion that the power of
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR attorney provided the power to create a mortgage. The power of attorney is one coupled with interest, and there was a principal-agent relationship between Sadashiva Shetty and Vamana Baliga.
31.2. What is only required to be considered is whether the mortgage created without referring to the name of Sadashiva Shetty is enforceable by the bank. A mortgage can be created in terms of Section 58 of the Transfer of Property Act, 1882 by several modes and methodologies. 31.3. A simple mortgage could be created without delivery of possession; a mortgage could be created by way of a conditional sale; a usufructuary mortgage could be created by handing over possession and permitting the mortgagee to receive the usufructs and English mortgage could be created by transfer of the mortgage property, and one of the most
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR common modes of creating a mortgage is by way of deposit of title deeds.
31.4. In the present matter, it is a mortgage by way of deposit of title deeds, which has been resorted to by the parties. The original documents relating to the property have been handed over by Sadashiva Shetty and all other family members to Vamana Baliga, including the physical possession of the property. It is these title deeds/documents which have been deposited by Vamana Baliga with the concerned co-operative banks. The mere deposit of the title deeds would by itself confer a right with the bank to bring the property for sale. 31.5. The submission of Sri.Ashok Haranahlli, learned senior counsel would have to be considered in a two-fold manner. The first is as regards the right of Vamana Baliga to mortgage and the
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR second is as regards the bank enforcing the mortgage.
31.6. Insofar as the right of Vamana Baliga to mortgage the property are dealt with in the earlier points. As regards the bank to enforce the mortgage, it is clear that firstly, when the mortgager had the right to mortgage the property, the mortgagee would have a right to enforce the mortgage. Secondly, the original title deeds having been deposited with the bank, the bank could enforce the mortgage in respect of those original title deeds. The bank having advanced monies, the monies, admittedly not having been paid, the right of the bank to enforce the mortgage cannot be assailed by the petitioners in the manner as done by setting up various claims against the power of attorney.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 31.7. There being a valid mortgage which has been created by way of deposit of title deeds, the bank, in my considered opinion, could enforce it and as such, I answer Point No.5 by holding that the execution of promissory notes and loan documents by the borrowers, namely Vamana Baliga and his associates, who are not the owners of the property, by creation of a mortgage by way of deposit of title deeds/documents has created an enforceable right with the banks against the property of Sadashiva Shetty and other family members, the entire property of the family having been mortgaged.
32. Answer to Point No.6: Whether the banks/cooperative societies were negligent or complicit in accepting a mortgage from persons who had no ownership or title in the properties?
32.1. Much has been sought to be made out that the banks were complicit with Vamana Baliga in
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR accepting a mortgage of the property of Sadashiva Shetty knowing fully well that the property belonged to Sadashiva Shetty, mortgage was created in the name of Vamana Baliga and his associates and therefore, negligence and or complicity is sought to be attributed with reference to the banks, by contending that the bank has accepted a mortgage from persons who did not have ownership or title to the property, some of the aspects relating to this point have been dealt with in answer to Point No.5.
32.2. Suffice it to say that Vamana Baliga being a power of attorney, being authorised to act on behalf of Sadashiva Shetty, the original documents being available with Vamana Baliga. Those documents have been deposited with the bank. What the bank was required to do was only to see if the original documents are made
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR available to it and an intent to create a mortgage by way of such documents. These aspects are established categorically by the manner in which the130ortgagee has been created. Whether Sadashiva Shetty was a member of the cooperative society or loan was taken in the name of Sadashiva Shetty or Sadashiva Shetty was a guarantor of the loan or not would lose their significance when an agreement of sale with power of attorney have been executed in favour of Vamana Baliga; the entire sale consideration has been received by Sadashiva Shetty, the original documents available with Vamana Baliga have been deposited to create a mortgage by way of deposit of title deeds. These aspects having been looked into by the bank, I do not find any negligence or complicity on part of the bank.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 32.3. A bank would be interested in securing its interest by way of mortgage which the bank has done in the present matter. Thus, I answer Point No.6. by holding that the banks / co- operative societies cannot be said to have been negligent and or acted in a complicit manner by accepting mortgage from Vamana Baliga. There being a right with Vamana Baliga under the power of attorney to mortgage the property, the original documents having been deposited, a valid mortgage has been created in favour of the banks / co-operative societies.
33. Answer to Point No.7: Whether the auction sales dated 15.12.2004 (Mangala Society) and 20.09.2007 (Janatha Society) and their confirmations are valid and legally sustainable? 33.1. The auctions have been carried out by issuing public notices except to contend that the mortgage is not valid, there is no other infirmity which has been pointed out in the
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR process of the auction which has been conducted and the confirmation of the sale. 33.2. Without any lacunae being pointed out and or any infirmity or violation of a particular provision of law, the auction sale, if conducted in a proper manner, would be valid and binding on all. In that view of the matter, I answer Point No.7 by holding that the auction sale dated 15.12.2004 conducted by Mangala and auction sale dated 20.9.2007 conducted by Janata / Abhyudaya and the subsequent confirmation of the auction are proper and valid.
34. Answer to Point No.8: Whether the execution proceedings under the Karnataka Co-operative Societies Rules, 1960, were conducted in compliance with Rule 34?
34.1. Rule 34 is reproduced hereunder for easy reference:
3. Application for execution to the Recovery Officer.- (1) Every decree-holder requiring execution of a decree under the provisions of
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR clause I of Section 101, shall apply to the Recovery Officer within whose jurisdiction the judgment-debtor resides or has property and shall deposit the probable cost of execution as may be fixed by such officer.
(2) Every such application shall be made in the form specified by the Registrar and shall be signed by the decree-holder. The decree-holder may indicate whether he wishes to proceed against the immoveable property mortgaged to the decree-holder or other immoveable property or to secure the attachment of moveable property. Where he wishes to proceed against immoveable property, he shall give in the applications such description of the property as is sufficient for its identification.
In case such property can be identified by boundaries or numbers in a record of rights, settlement or survey, the specification of such boundaries or numbers and the specification of the judgment-debtor's share or interest in such property to the best of the belief of the decree- holder and so far as he has been able to ascertain, shall be given in the application. (3) On receipt of such application, the Recovery Officer shall verify the correctness and genuineness of the particulars set forth in the application with the records, if any, in the office of the Registrar and prepare a demand notice, in writing in duplicate in the form specified by the Registrar, setting forth the name of the judgment-debtor and the amount due and forward it to the Sales Officer. In case the execution is against immoveable property, the amount shall include the expenses, if any, and the batta to be paid to the person who shall
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR serve the demand notice, the time allowed for payment; and in case of non-payment, the particulars of the immoveable properties, if any, to be attached and sold or to be sold without attachment as the case may be:
Provided that where the Recovery Officer is satisfied that a judgment-debtor with intent to defeat or delay the execution proceedings against him is about to dispose of the whole or any portion of his property, the demand notice issued shall not allow any time to the judgment- debtor for payment of the amount due by him and the property of the defaulter shall be attached forthwith.
34.2. Though it has been contended that the execution proceedings under the KCS Act and KCS Rules, more particularly in terms of Rule 30 and Rule 34 have not been conducted in a proper manner, there is nothing which has been placed on record to substantiate the same. Rule 34 only provides for every decree holder requiring execution of a decree to apply to the recovery officer and the manner in which the recovery officer is to take up the application and register it.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 34.3. As indicated supra, there is nothing which has been placed on record indicating non- compliance with Rule 34, the burden and onus of proof lying on the person who alleges that the procedure has not been followed. 34.4. The decree having been passed, execution proceedings were initiated, and no fault can be found in relation thereto. Hence, I answer Point No.8 by holding that the execution proceedings initiated under Rule 34 of the Karnataka Cooperative Societies Rules, 1960 are proper and correct.
35. Answer to Point No.9: Whether the purchasers derived any valid title to the properties through the execution sale?
35.1. A mortgage having been validly created, proceedings having been taken up under Section 70 of the KCS Act, 1959, an award having been passed, the same having been brought in execution, and in the execution,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR auction having been conducted under which the purchaser has purchased the property, in pursuance of which, sale deeds have been executed in favour of the purchaser, can only lead to a simple categorical finding that the auction purchaser would derive a valid title over the properties which are brought to auction. 35.2. Hence, I answer Point No.9, by holding that the auction purchasers in the present matter have derived valid title to the properties subject matter of the execution sale.
36. Answer to Point No.10: Whether Section 60 of the KCS Act prohibits loans to non-members, and if so, whether the loans in question are contrary to the Act?
36.1. By referring to Section 60, it is sought to be contended that a loan has been made to Vamana Baliga and not to Sadashiva Shetty and the mortgaging of the property of Sadashiva Shetty could not have been done
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR since Sadashiva Shetty was not a member of the society.
36.2. Section 60 is reproduced hereunder for easy reference:
60. Restrictions on loans.- (1) A co-operative society shall not make a loan to any person other than a member:
Provided that a co-operative society may make loans to another co-operative society.
(2) Notwithstanding anything contained in sub-
section (1), a co-operative society may make a loan to a depositor on the security of his deposit.
36.3. A perusal of Section 60 would indicate that a cooperative society shall not make a loan to any person other than a member. In the present case, the loan has been advanced to Vamana Baliga who admittedly is a member of the society. The security which has been offered for the said loans, are the properties of Sadashiv Shetty. There being no dispute that the loan has been granted to a member,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Vamana Baliga, the question of invoking Section 60 would not arise.
36.4. A member of a Cooperative Society can borrow a loan under the security of a property even though the same may not belong to him. Collateral security could be offered in respect of the said loan. In the present matter, as observed supra, a mortgage by way of deposit of title deeds has been created. On the security of which, a loan has been granted to Vamana Baliga, and his associates, who are members of the Cooperative Society. There is no embargo under section 60 for such a security being provided, the embargo is only on who the borrower can be and not as regards whose property can be given as security. 36.5. Thus, I answer Point No.10, by holding that there is no violation of Section 60 of the KCS Act 1959, the loan which has been sanctioned
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR in favour of Vamana Baliga, he being a member of the Cooperative Society, is proper and correct. Mortgaging of a property of a person who is not a member of the Cooperative Society would not take away the right of the Cooperative Society to sanction a loan in favour of the member by taking on security of a person who is not a member.
37. Answer to Point No.11: Whether the provisions of Section 33 (regarding the charge on the land of members) were complied with by the borrowing parties and the societies? 37.1. References is made to Section 33 of the KCS Act, 1959 to contend that the borrower has to make a declaration as to whether he owns the land, he is a tenant of the land, as regards the nature of his rights on the property, etc., and on that basis, it is contended that Vamana Baliga and his associates ought to have made a declaration that the property did not belong to
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR them. No such declaration having been made, Section 33 has been violated.
37.2. Section 33 of the KCS Act 1959 is reproduced hereunder for easy reference:
33. Charge on land, owned by members or held as tenants by members borrowing loans from certain co-operative societies.-
(1) Notwithstanding anything contained in this Act or in any other law for the time being in force,--
(i) any person who makes an application to a co-operative society of which he is a member for a loan shall, if he owns any land, or holds any land as a tenant make a declaration in the prescribed form. Such declaration shall state that the applicant thereby creates a charge on the land owned by him or on his interest in the land held by him as tenant and specified therein for the payment of the amount of the loan which the society may make to the member in pursuance of the application and for all future advances, if any, required by him which the society may make to the member as such member subject to such maximum as may be determined by the society together with interest on such amount of the loan and advances;
(ii) a declaration made under clause (i) may be varied at any time by a member with the consent of the co-operative society in favour of which such charge is created;
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR
(iii) no member shall alienate the whole or any part of the land or any interest of his in the land specified in the declaration made under clause
(i) or varied under clause (ii) until the whole amount borrowed by the member together with interest thereon is paid in full:
Provided that standing crops on any such land may be alienated with the previous permission in writing of the society; [Provided further that it shall be lawful for a member to mortgage such lands or any part thereof in favour of the State Government or an Agricultural and Rural Development Bank.
Provided also that if a part of the amount borrowed by a member is paid, the co-operative society with the approval of the financing bank to which it may be indebted may, on an application from the member, release from the charge created by the declaration made under clause
(i) or varied under clause
(ii), such part of the land or of the interest in the land specified in the declaration as it may deem proper, with due regard to the security for the balance of the amount of loan outstanding from the member.]
(iv) any alienation made in contravention of the provisions of clause (iii) shall be void;
(v) subject to the prior claims of the Government in respect of land revenue or any money recoverable as land revenue and the prior claims of any person in whose favour alienation of the land or interest in such land has been effected and duly registered, before the date of the grant of the loan by the society,
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR there shall be a first charge in favour of the society on the land or interest in the land specified in the declaration made under clause
(i) or varied under clause (ii) for and to the extent of the dues owing by him on account of the loan.
(2) Notwithstanding anything contained in
(i) the record of rights maintained under the said Act shall also include the particulars of every charge on land or interest in land created under sub-section (1);
(ii) the co-operative society in whose favour a charge is created under sub-section (1) shall communicate the particulars of the charge, and when the loan is discharged, the cessation of the charge, to the Deputy Commissioner or the prescribed officer and he shall cause necessary entries to be made in the record of rights;
(iii) the State Government may, by notification in the official Gazette, make rules to carry out the purposes of clauses (i) and (ii). Explanation.--For the purpose of this section,-- (1) ‗land' shall mean land to which 1 (2) ‗co-operative society' shall mean a co- operative society of which majority of the members are agriculturists and which is,--
(a) a credit society the primary object of which is to obtain credit for its members; or
(b) any other class of society specified in this behalf by the State Government by general or special order
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 37.3. A perusal of clause (1) of subsection (1) of Section 33 would only indicate that the same applies if a person who makes an application to a cooperative society, of which he is a member for a loan, if he owns any land or holds any land as a tenant, make a declaration in the prescribed format and when such a declaration is made under clause (3) of subsection (1) of Section 33, the said land cannot be alienated. Section 33 applies in a situation where there is no mortgage which has been created, and the borrower has to make a declaration about the lands owned by the borrower and undertaking that he would not alienate the property. The second proviso providing that even if such a declaration has been made, such a member could mortgage the lands in favour of the State Government or Agriculture and Rural Development Bank. This is a salutary provision
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR which has been brought about to enable agriculturists to avail of a loan on a declaration that they would not alienate the land but also receive loans from the State Government. 37.4. The same does not apply to a mortgage of a property since what is contemplated under Section 33 is only a declaration. In the present matter, there being a mortgage of the property by way of deposit of title deeds, Section 33 would not be applicable to the present matter. Hence, I answer Point No.11 by holding that the provision of Section 33 are not applicable to the present matter. Hence, the question of compliance with the same would not arise.
38. Answer to Point No.12: Whether the appellate and revisional authorities under Sections 101 and 108 of the KCS Act failed to consider the legal infirmities in the underlying mortgage and auction proceedings?
38.1. Though it has been contended that the appellate and the revisional authorities have
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR failed to consider the legal infirmities of the mortgage, I have dealt with all the aspects relating to mortgage in answer to the various points raised above. Even the appellate and revisional authorities have considered the fact of a mortgage by way of deposit of title deeds having been made and the auction proceedings have been taken up. It is those aspects which are material to the present matter. Be that as it may, the other incidental aspects which have been raised by the petitioners have also been dealt with hereinabove. Those incidental aspects have been raised only to confuse and confound the matter and as indicated supra the petitioners even after having received the entire consideration have sought to assert right over the property which they do not have any right over.
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 38.2. The entire family having sold the entire property, the petitioners have tried to in a dishonest manner usurp the property purchased by the auction purchaser in an auction at the market value of the said property. Hence, for all the reasons as indicated by the appellate and revisional authorities as also that indicated by me in the present matter, I answer Point No.12 by holding that the appellate and revisional authorities under Section 101 and 108 of the KCS Act, 1959 have considered all the allegations which have been made, by the petitioners. The mortgage being valid, the auction conducted is also valid and there is no infirmity in the same.
39. Answer to Point No.13: Is the challenge to the awards, auction sales, sale confirmations, and orders of the appellate/revisional authorities barred by limitation?
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR 39.1. The events are not in dispute inasmuch as the agreement of sale, execution of power of attorney and payment of the entire sale consideration occurred between the year 1994 to 1997. The entries in the revenue records were made in the year 1999-2000. The loan had been availed in the year 2000. The right of the banks were entered in the revenue records in the year 2000. Default on the loan amount having occurred in the year 2001, proceedings were initiated. An award/decree had been passed in the year 2003. Auction was conducted and confirmed in the year 2007. A suit had been filed by the petitioners in the year 2009 which came to be subsequently dismissed, and it is thereafter that an appeal had been filed in the year 2013 which also came to be dismissed on 13.2.2014. A revision petition was filed which came to be dismissed
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR on 2.9.2021 and thereafter, writ petitions were filed on 14.12.2023 which were withdrawn on 5.8.2024 and the present writ petitions have been filed on 17.9.2024.
39.2. From the above sequence of events, it is clear that the entries made in the year 1999-2000 were not challenged. The decree/award, which had been passed in the year 2003 was finally challenged in the year 2013 after the auction having taken place and the sale had been confirmed. The said appeal having been dismissed on 13.2.2014, the revision petition that was filed came to be dismissed on 2.9.2021. Thus, between the decree to the appeal, there is a gap of 10 years, between the sale confirmation and appeal there's a gap of six years, between the dismissal of the revision petition and filing of the first set of writ petitions the gap of two years and with the
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR second set of writ petition it is more than three years.
39.3. What is required to be seen is the limitation period for filing of the appeal which under Section 105 of the KCS Act, 1959 is 60 days and for filing of a revision is 180 days in terms of Section 108. Insofar as the writ petition is concerned a writ petition would have to be filed within a reasonable period of time otherwise the petitioner would be held to be guilty of acquiescence and latches. In the present case revision petition having been dismissed in the year 2021; one set of writ petition having been filed and withdrawn the present petition having been filed in the year 2024 is in my considered opinion only to wake up dead issues. The award having been passed in year 2003 and the sale had been confirmed in the year 2007 and thereafter, the auction purchaser having put up
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR construction of multi-storied residential dwelling units after obtaining permission from all concerned authorities as could be seen from the documents which had been produced by respondent No.10 including the photographs as also taking into consideration the newspaper publications and caution notices issued by the petitioners would only indicate that the petitioners have sought to abuse the process of this Court to try and coerce the auction purchaser to come to the terms of the petitioners.
39.4. This Court cannot allow itself to be used and the process be abused in such a manner for the purpose of settling scores by private litigants. The present petition is hopelessly barred by limitation as also petitioners are guilty of acquiescence and latches and abuse of the
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR process of this Court as regards which costs would have to be imposed.
39.5. I answer Point No.13 by holding that the challenge to the award, auction sale, sale confirmation and the orders of the appellate and revisional authorities is apart from being barred by limitation, the petitioners are also guilty of acquiescence and latches.
40. Answer to Point No.14: What order?
40.1. In view of my finding on all the above points, there are absolutely no merits in the present matter and as held supra, the present writ petitions are an abuse of the process of Court and as such I pass the following:
ORDER.
i) Writ petitions are dismissed.
ii) Petitioners would be liable to make payment of cost of Rs.2 lakhs payable to the Karnataka State Legal Service
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NC: 2025:KHC:44339 WP No. 27349 of 2024 C/W WP No. 28076 of 2024 HC-KAR Authority within a period of 30 days from the date of receipt of a copy of this order. In the event of such payment not being made, KSLSA would be free to enforce this order for recovery of the costs as arrears of land revenue.
iii) Registrar (Judicial) is directed forward a copy of this order to the Member Secretary KSLSA for necessary action.
SD/-
(SURAJ GOVINDARAJ) JUDGE LN,PRS List No.: 1 Sl No.: 104