Karnataka High Court
Sri K T Prakash vs Sri Umesh C on 21 July, 2023
Author: H.P. Sandesh
Bench: H.P. Sandesh
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF JULY, 2023
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CIVIL REVISION PETITION NO.177/2023
BETWEEN:
1. SRI K.T. PRAKASH
AGED ABOUT 68 YEARS,
S/O LATE K.G. TULASIRAM,
RESIDING AT NO 2,
GROUND FLOOR,
2ND BLOCK, 3RD STAGE,
BASAVESHWARANAGAR,
BANGALORE-79.
SRI K.T. GOPALAKRISHNA
SINCE DECEASED ON 06-06-2022
DURING THE PENDING SUIT
BY HIS LEGAL HEIRS
2. SMT. K.G. SAROJA
AGED ABOUT 63 YEARS,
W/O SRI K.T.GOPAL KRISHNA,
RESIDING AT NO.10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04.
3. KUM. MAHIMA
AGED ABOUT 21 YEARS
D/O SRI K.T.GOPAL KRISHNA,
RESIDING AT NO.10,
NEW HIGH SCHOOL ROAD,
2
V.V. PURAM,
BANGALORE-04
4. SRI K.T. GOVARDHAN
AGED ABOUT 64 YEARS,
S/O LATE K.G. TULASIRAM,
RESIDING AT NO.2, 1ST FLOOR,
2ND BLOCK, 3RD STAGE,
BASAVESHWARANAGAR,
BANGALORE-79
5. SRI K.T. SUDARSHAN
AGED ABOUT 61 YEARS,
S/O LATE K.G.TULASIRAM,
R/AT NO.10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04
6. SRI K.V. NAGESH
AGED ABOUT 73 YEARS,
S/O LATE K.G.TULASIRAM,
R/AT NO 10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04
7. SMT. K.V.NAGARATHNA
AGED ABOUT 73 YEARS,
W/O LATE K.T. VENKATAGIRI,
R/AT NO.10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04.
8. SMT. K.V. SUNITHA
AGED ABOUT 53 YEARS,
D/O LATE K.T. VENKATAGIRI,
R/AT NO.10,
3
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04
9. SMT. K.V. REKHA
AGED ABOUT 49 YEARS,
D/O LATE K.T. VENKATAGIRI,
R/AT NO.10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04. ... PETITIONERS
(BY SRI SOMNATH H.S., ADVOCATE)
AND:
1. SRI UMESH C.,
AGED ABOUT 49 YEARS
S/O LATE M. CHIKKAMADA,
R/AT NO.48, 1ST MAIN, 2ND CROSS,
BHUVANESHWARANAGAR,
BEHIND KEDAPASWAMY MUTT,
BENGALURU-560023
2. SRI DEVARAJ C
AGED ABOUT 63 YEARS,
S/O SRI CHIKKARANGAPPA,
R/AT NO.975, 2ND CROSS,
4TH BLOCK, HMT LAYOUT,
NELAGADARANAHALLI,
NAGASANDRA,
BENGALURU-560073
3. SRI K.N. OMPRAKASH
AGED ABOUT 62 YEARS,
NEW NO.33, 4TH CROSS,
S.P. EXTENSION,
MALLESHWARAM,
BANGALORE-560003
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4. KEB EMPLOYEES CO-OPERATIVE SOCIETY LTD.,
A SOCIETY REGISTERED UNDER THE PROVISIONS
OF THE CO-OPERATIVE SOCIETIES ACT,
PREVIOUSLY HAVING ITS
REGISTERED OFFICE AT
ANANDA RAO CIRCLE,
BENGALURU
AND PRESENTLY KNOWN AS KPTCL
EMPLOYEES CO-OPERATIVE SOCIETY LTD,
AT BESCOM, DAS BUILDING
INTEGRATE CONTROL CENTRE II SIDE,
RAJAJINAGAR,
BENGALURU-560010
REPRESENTED BY ITS SECRETARY,
SRI K. SHIVAKUMAR
5. SRI K.P.CHAMPAKADHAMASWAMY
AGED ABOUT 65 YEARS,
S/O LATE K.S. PUTTASWAMY,
R/AT NO.291, 1ST 'A; MAIN,
2ND STAGE, MAHALAKSHMIPURAM,
BENGALURU-560086. ... RESPONDENTS
(BY SRI K.SUMAN, SENIOR COUNSEL A/W.
SRI SIDDHARTH SUMAN, ADVOCATE FOR R1 TO R3 & R5;
SRI K.S.KALLESHAPPA, ADVOCATE FOR R4)
THIS CRP IS FILED UNDER SECTION 115 OF CPC,
AGAINST THE ORDER DATED 07.01.2023 PASSED ON I.A.NO.IV
IN O.S.NO.731/2019 ON THE FILE OF THE ADDITIONAL SENIOR
CIVIL JUDGE, NELAMANGALA, DISMISSING THE I.A.NO.IV FILED
UNDER ORDER 7 RULE 11(a) AND (d) OF CPC FOR REJECTION
OF PLAINT.
THIS CRP HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON 06.07.2023 THIS DAY, THE COURT PRONOUNCED
THE FOLLOWING:
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ORDER
This revision petition is filed challenging the order dated 07.01.2023 passed on O.S.No.731/2019 on the file of the I Additional Senior Civil Judge and JMFC, Nelamangala.
2. Heard the learned counsel appearing for the respective parties.
3. The petitioners herein have filed an application under Order VII Rule 11(a) and (d) of CPC before the Trial Court for rejection of the plaint on the ground that the same does not disclose cause of action and also it is barred under Section 118 of the Karnataka Co-operative Societies Act. In support of this application, defendant No.3 sworn to an affidavit contending that the suit is filed by the plaintiffs seeking the relief of declaration to declare that the compromise entered between defendant No.1 i.e., society and defendant Nos.2 to 9 is not binding on defendant No.1 and its members since, the plaintiffs being the members of defendant No.1 society have no independent right, title, interest to challenge the compromise decree passed in 6 O.S.No.360/2012 and the said compromise decree has been passed in the interest of defendant No.1 society and its site owners and defendant No.1 and its members have taken all the benefits under the terms of compromise. It is also contended that the plaintiffs in the suit are neither parties in O.S.No.360/2012 nor they are individual parties to the compromise entered into between defendant No.1 society and defendant Nos.2 to 9 culminating into a decree in O.S.No.360/2012 and the plaintiffs are not signatories to any of the documents thus, they are strangers to these documents. The plaintiffs are none other than the members of defendant No.1 society who are also admittedly ex-directors of defendant No.1 society. Therefore, whatever acts done by defendant No.1 society by getting approvals in the general body meetings are binding on the plaintiffs. It is also contended that the suit is barred under Section 118 of the Karnataka Co-operative Societies Act and jurisdiction of the Court is expressly barred and High Court has not given any liberty to the plaintiffs to file the present suit but the plaintiffs falsely contend that liberty was given in the said petition. It is also contended that the plaintiffs 7 have challenged the compromise decree passed in O.S.No.360/2012 by filing an application under Order XXIII Rule 3(a) of CPC before this Court and this Court vide order dated 17.09.2019 was pleased to dismiss the said application holding that the grievance of the plaintiffs is touching upon the management of the business of defendant No.1 society. Therefore, such dispute raised by the plaintiffs comes within the purview of Section 70 of Karnataka Co-operative Societies Act. Hence, it requires to invoke Order VII Rule 11(a) and (d) of the CPC.
4. This application was resisted by filing an objection statement contending that in the plaint, it is specifically stated that they have issued a notice under Section 125 of the Karnataka Co-operative Societies Act before filing of the suit and there is an averment in this regard in the plaint itself and also permission is sought to file the suit before expiry of the period and hence, the suit is not barred under Section 118 of the Karnataka Co-operative Society Act. It is also contended that in writ petition, a liberty was given stating that it is open to the 8 respondents to work out their remedy by filing an appropriate suit challenging the compromise decree on the grounds that would void a contract, on which such a decree is founded. On that observation, writ petition was disposed off and hence, they cannot contend that no liberty is given in the writ petition. It is contended that when an earlier application was filed under Order XXIII Rule 3(a) of CPC, same has been considered by the Trial Court as well as by the High Court, now, they cannot contend that the plaint has to be rejected. It is also contended that in paragraph 8 of the application it is stated that the plaintiffs have clearly admitted at paragraphs 14 and 17 of the plaint that the dispute involved in the present suit touches the policy and basic administration of defendant No.1 society is totally incorrect and meaningless in view of the express contention of fraud pleaded by the plaintiffs in the above suit and the said aspect has also been duly considered by the High Court in W.P.No.50638/2019, under the circumstances, they cannot maintain an application under Order VII Rule 11(a) and (d) of CPC.
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5. The Trial Court having considered the grounds urged in the application and also the objections, formulated the point that whether the defendants have made out the grounds to reject the plaint. The Trial Court relied upon the judgment of the Apex Court reported in (2017) 13 SCC 174 in the case of MADANURI SRI RAMACHANDRA MURTHY vs SYED JALAL and so also the judgment reported in (2020) 7 SCC 366 in the case of DAHIBEN vs ARVINDBHAI KALYANJI BHANUSALI (GAJRA) DEAD THROUGH LEGAL REPRESENTATIVES AND OTHERS and also extracted Section 118 of the Karnataka Co- operative Societies Act to see that whether there is bar of jurisdiction of Courts and also taken note of the judgment of the Apex Court reported in (2012) 5 SCC 642 in the case of MARGET ALMEIDA AND OTHERS vs BOMBAY CATHOLIC CO-OPERATIVE HOUSING SOCIETY LIMITED AND OTHERS and the judgment of the Apex Court reported in (2020) 6 SCC 629 wherein the Apex Court considered the ratio that stranger to the compromise cannot challenge the compromise decree by way of separate suit. But taken note of the fact that already an application was filed under Order XXIII Rule 3(a) of CPC before 10 Trial Court and the same was rejected and against that order, writ petition was filed wherein liberty was given and accordingly, they have filed the suit and for that reason, the application filed under Order VII Rule 11(a) and (d) was dismissed. Hence, the present revision petition is filed before this Court.
6. The main contention of the counsel for the petitioners before this Court that the Trial Court fails to consider the application filed under Order VII Rule 11 (a) and (d) of CPC and the grounds urged in the said application. It is settled law that the strangers cannot seek the relief of setting aside the decree and the very order of the Trial Court construing and assuming that the liberty granted by the High Court supersedes the law laid down by the Apex Court is in itself is opposed to law and judicial hierarchy. The counsel in support of his arguments relied upon the judgment of Triloknath Singh vs. Anirudh Singh reported in (2020) 6 SCC 629 and also Sree Surya Developers and Promoters vs. N Shyleshprasad and others reported in (2022) 5 SCC 736 and contends that a stranger cannot challenge the judgment and decree passed on the compromise and the 11 Trial Court failed to appreciate that under Order XXII Rule 3(a) of CPC, there is a clear bar on suit seeking an order for setting aside of compromise decree on the ground that compromise on which the decree is based was not lawful. The counsel also vehemently contend that the relief sought is declaratory relief against the compromise decree and the relief sought in the earlier suit is to declare that the Power of Attorney is unenforceable and the earlier suit is for 10 acres and subsequently in respect of 'B' karab land, the same was got regularized and subsequently, compromise has been entered between the parties for making additional payment. In the application, it is specifically contend that there is no cause of action and also the suit is barred by law under Order XXIII Rule 3(a) of CPC. When such ground is urged, the Trial Court ought to have allowed the application.
7. Per contra, the counsel for the respondents would vehemently contend that in the suit, the specific averment is made to show that under what circumstances, the compromise was entered into and the plaintiffs are the directors for the 12 period from 2013 to 2018 and compromise was entered in the year 2017 and the same is not in the interest of the society and the plaintiffs are also the directors, members of the society and no resolution was passed in this regard. The counsel also vehemently contend that the earlier order passed by this Court in W.P.No.50638/2019 liberty was given and already they have approached the Court and when an application is filed under Order XXIII Rule 3(a) of CPC seeking cancellation of the said compromise decree and the same was questioned and when liberty was given by this Court, an application was also filed in O.S.No.360/2012 and when the same was not considered, without any other option, the suit was filed stating the cause of action in paragraphs 33 and 34. The counsel also would contend that in the plaint it is specifically pleaded in paragraphs 13 to 16 that under what circumstances, the compromise was entered and the Court has to look into only the averments of the plaint and not the defence in an application filed Order VII Rule 11 of CPC. The counsel also vehemently contend that earlier also there were sale agreement, sale deed, GPA and challenge is only in respect of GPA and the suit is also for 10 acres of property 13 and compromise was in respect of other than the subject matter of the suit. It is also contended that defendant No.1 was deleted and compromise was entered between the plaintiffs and the society and the same was challenged and the reasons are also set out in the plaint. The counsel also would contend that the suit for recovery is also pending and karab land not belongs to the plaintiffs who entered into a compromise.
8. In support of the arguments, the counsel for the respondents produced the documents that is copy of the registered sale deed dated 02.03.1981, copy of the registered sale deed dated 08.03.1989, copy of the agreement of sale dated 27.12.1992, registered GPA dated 17.03.1993, copy of the agreement of sale dated 09.02.1995, copy of registered GPA dated 14.02.1995, copy of RTC extracts, copy of intimation, conversion order, survey tippani, approved layout plan, copy of plaint and written statement in O.S.No.143/2006, copies of letters dated 23.12.2016 sent by respondent Nos.1 to 3 to the President/Secretary of respondent No.4 society opposing the proposal for illegally compromising the suit with the petitioners 14 and another letter dated 10.12.2017 and copy of the sale agreement dated 14.02.1995 executed by M A Eswarappa in favour of M/s Karnataka Electricity Board Employees Co- operative Society Limited and so also GPA and copy of the relinquishment deed dated 02.07.2004 executed by Narasimaiah, M A Eshwarappa, K T Venkatagiri, K T Prakash, K T Gopalakrishna, K T Govardhana, K T Sudarshan represented by their GPA holders.
9. In reply to the arguments, the counsel for the petitioners would vehemently contend that the Trial Court has committed an error in dismissing the application when already the Trial Court granted an order of stay, there cannot be one more suit in respect of the issue involved between the parties and in view of the filing of a suit, the affected parties are members of the society who have purchased the sites and in view of the pendency of the suit, the members of the society cannot enjoy their right since they have invested the money in purchasing the sites.
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10. Having heard the learned counsel appearing for the respective parties and also on perusal of the grounds urged in the revision petition as well as also the documents placed before the Court, the point that would arise for the consideration of this Court that:
Whether the Trial Court has committed an error in dismissing the application filed under Order VII Rule 11(a) and (d) of CPC?
11. Having perused the material on record it is not in dispute that the plaintiffs have filed an application before disposal of the matter in O.S.No.360/2012 and the same was numbered as I.A.No.10 wherein also set out the ground invoking Order XXIII Rule 3(a) of CPC and the same was dismissed by the Trial Court in coming to the conclusion that no prima facie reason is shown to establish that the agreement through compromise is by misrepresentation, fraud or mistake and they were made to agree such compromise being the parties to the said compromise and comes to the conclusion that there is no merit in the application. Being aggrieved by the said order, writ 16 petition was filed and the same was numbered as W.P.No.50638/2019 and this Court having considered the grounds urged in the petition comes to the conclusion that the very revision petitioners made the application before the Trial Court and they have to workout their remedy elsewhere by filing an appropriate suit for challenging the subject compromise decree on the grounds that would void a contract, on which, such a decree is founded, or on any other ground. Hence, the suit is filed and the same is numbered as O.S.No.731/2019. It is settled law that if an application is filed under Order VII Rule 11, the Court has to look into the averments of the plaint and not the defence of the defendant since the defence is immaterial.
12. On perusal of the plaint wherein it is stated with regard to earlier suit in O.S.No.360/2012 and the relief is sought for the declaration that the GAP executed by the plaintiffs and their brother K T Venkata Giri which is registered as document No.1320 of 1992-93 dated 17.03.1993 is unenforceable as it is cancelled and also for permanent injunction. The copy of the plaint also produced. It is their case that the plaintiffs are the 17 directors of defendant No.1 society from 2013 to 2018. It is also their case that a compromise was entered between the parties deleting defendant No.1 i.e., between the plaintiffs and the society in the said suit. The very contention of the plaintiff in the said suit is that the said compromise was entered against the interest of the society and in paragraphs 12 and 14 it is stated that the plaintiffs herein are the duly elected directors of defendant No.1 society and the election held during the month of August 2013 and the committee of management consisted of 15 directors apart from the plaintiff herein. It is contended that proposal for entering into compromise in the above case was not brought to the plaintiff's notice and there is no proper resolution and the defendants also not depicts the fact that they are also the directors who have been elected and in the plaint, in paragraph 11, contended that fraudulent and illegal understanding between defendant Nos.2 to 9 and defendant No.1 society will adversely affect the interest of the plaintiffs herein and the members of the society. It is contended that by entering into compromise, the liability to the tune of Rs.6,40,00,000/- is fastened illegally on defendant No.1 society 18 which has to be paid in favour of defendant Nos.2 to 9 and a malafide understanding of defendant No.1 society is vitiated by fraud.
13. Having perused the plaint averments it is clear that the compromise was entered in the year 2017 and at that point of time, the plaintiffs were also directors of the society and it is also the contention that in view of the compromise, there was a burden on the society to pay Rs.6,40,00,000/- but the said compromise was not in the interest of society. In paragraph 16, it is contended that in collusion with defendant Nos.2 to 9, defendant No.1 was deleted and having perused the material on record it discloses that they claim that they are the directors and members of the society and no doubt, compromise was entered between defendant Nos.2 to 9 and the society in the present suit. The averments of the plaint is clear that under what circumstances, the compromise came into existence. In paragraph 33 and 34 it is specifically mentioned that cause of action to the suit was arose on 13.11.2019 when this Court reserved the liberty to the plaintiffs to file the suit and cause of 19 action arose for the suit at Nelamangala. When fraudulent compromise decree was entered into by defendant No.1 with defendant Nos.2 to 9 on 22.06.2017 by that time the plaintiffs are the directors of the society and that is also a disputed question of fact. The revision petitioners claim that the compromise was entered based on the resolution and the said fact cannot be decided in an application filed under Order VII Rule 11 of CPC and the Court also cannot look into the defence of the defendants which is immaterial and the Court has to look into the averments of the plaint. Hence, the very contention that there is no cause of action to file the suit cannot be accepted.
14. The principles laid down in the case of SREE SURYA DEVELOPERS AND PROMOTERS is not in dispute wherein the Court held that the plaint can be rejected on ground of barred by law, clever drafting held would not permit the plaintiff to make suit maintainable which otherwise would not be maintainable and / or barred by law when clever drafting of plaint has created illusion of a cause of action, Court will nip it in the bud at the 20 earliest so that bogus litigation will end at earlier stage and also held that the suit is not maintainable in view of Order XXIII Rule 3(a) of CPC on the ground that it is not lawful, substantive independent suit questioning compromise decree not maintainable to challenge consent decree on ground that it is not lawful, reiterated, party to such decree has to approach the same Court, which recorded compromise based on which the consent decree in question was issued. The other judgment which has been relied upon by the petitioners' counsel is that TRILOKINATH SINGH's case and in the said judgment in paragraph 16 it is held that the Court cannot direct the parties to file a separate suit and the suit will be barred in view of the provisions of Order XXIII Rule 3(a) of CPC and the Apex Court held that independent suit filed by the stranger to compromise challenging lawfulness of compromise decree, separate suit is not maintainable questioning lawfulness of compromise must approach the same Court which recorded the compromise and law is clarified but in the case on hand, averment made in the plaint is very clear that they are the directors during the period of compromise and also it is important to note that earlier suit in 21 O.S.No.360/2012 was filed against the society and the President was made as defendant No.1 but while compromising, defendant No.1 was deleted and society directly entered into the compromise. It is rightly pointed out by the respondents that in the said suit, whether the issue with regard to execution of GPA is enforceable or not but compromise was entered and accordingly, defendant No.1 society is liable to pay an amount of Rs.6,40,00,000/- hence, the burden is on the society. Admittedly, the plaintiffs are the directors of the society during the period of compromise entered between the parties. When such averments are found in the plaint, they cannot be termed as strangers. Hence, the principles laid down in the judgment of TRILOKINATH SINGH's case is not applicable to the facts of the case on hand since they are not the strangers. It is also noticed that compromise terms are contrary to the relief sought in the earlier suit and when such contention is taken by the plaintiffs, the Court has to look into the plaint averments and not the defence of the defendants.
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15. The other contention of the petitioners that the suit is barred. The Trial Court has given the reason that already application was filed under Order XXIII Rule 3(a) of CPC and the same was challenged before this Court in writ petition wherein liberty was also given to the petitioners and the same is also set down in paragraph 33 of the suit regarding cause of action. It has to be noted that when liberty was given and these petitioners were also parties to the said writ petition and the same has not been challenged and the order also attained its finality, now, they cannot contend that no such liberty was given. On perusal of the order of the High Court and also in the order of the Trial Court particularly in paragraph 17, it has been discussed with regard to the bar is concerned under Order XXIII Rule 3(a) and the plaint averments is clear and the same cannot be distinguished in view of the judgment of the Apex Court which have been referred by the petitioners herein and hence, I do not find any error committed by the Trial Court in rejecting the application and the matter requires trial and disputed question between the plaintiff and the defendant needs trial and the same has to be considered only after the trial and suit 23 cannot be thrown at the threshold in coming to the conclusion that there is no cause of action and also suit is barred by limitation.
16. No doubt, in SREE SURYA DEVELOPERS AND PROMOTERS's case, the Apex Court held that by clever drafting held would not permit the plaintiff to make suit maintainable which otherwise would not be maintainable and / or barred by law when clever drafting of plaint has created illusion of a cause of action, Court will nip it in the bud at the earliest so that bogus litigation will end at earlier stage. Having perused the averments made in the plaint and going through the entire averments and material, I do not find any such circumstances that it is only a clever drafting since specific grounds are urged in the plaint that the plaintiffs are the directors of the society at the time of compromise and also contended that no resolution was passed to enter such compromise and payment is also Rs.6,40,00,000/- and contention is that in view of the said compromise, it burdens the society at large and the members of the society will also affected in view of the said compromise. It is noticed that 24 defendant No.1 in the said suit while entering into compromise was got deleted and compromise entered between the plaintiff and society and hence, it requires a trial. In view of the pleadings set down in the plaint narrating the facts under what circumstances, the compromise was entered into and whether it amounts enrichment of the plaintiffs and there was a challenge filing an application and the same was rejected and the same was challenged in the writ petition and already liberty was given in the writ petition to file a separate suit in paragraph 4 of the order and the petitioners herein contended in the writ petition that the plaintiffs have to workout their remedy elsewhere and hence, an observation is made that the plaintiffs have to workout their remedy by filing an appropriate suit challenging the said compromise decree on the ground that would void contract, on which, such a decree is founded, or on any other ground and the said order is also passed at the instance of the petitioners herein, when they have raised the ground that they have to workout their remedy elsewhere and liberty was given and now they cannot contend that no cause of action and suit is barred by law. Hence, I answer the point as negative.
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17. In view of the discussions made above, I pass the following:
ORDER The revision petition is dismissed.
Sd/-
JUDGE SN