Karnataka High Court
K. Ghouse Peer vs The Registrar Of Co-Operative ... on 13 April, 2000
Equivalent citations: ILR2000KAR3132, 2000(5)KARLJ115
Author: G. Patribasavan Goud
Bench: G. Patribasavan Goud
ORDER
1. The third respondent-Bank obtained an award against the petitioner. The property of the petitioner had been mortgaged in favour of the third respondent-Bank in respect of the loan taken by the petitioner and two of his brothers. In execution of the award, the said mortgaged property was brought to sale. Since the property mortgaged was large in extent, only a portion of that property was sold in execution of the award, and, in the said sale, the third respondent-Bank-decree-holder itself purchased that portion of the property. The sale proceeds were sufficient to discharge the amount due under the award. The award therefore stood fully satisfied. So far as the loan transaction between the petitioner and the third respondent, therefore, there was nothing that the third respondent could claim from the petitioner. In these circumstances, when the petitioner sought for return of original documents from the Bank (since the mortgage was by deposit of title deeds), the Bank took up the contention as follows: It is the responsibility of the petitioner to meet the expenses of registration of the property sold in favour of the Bank in the name of the said Bank. Secondly, the Bank in turn again brought this property to sale because it was a non-banking asset, and, therefore, the said Bank could not continue to hold on to it. According to the Bank, even the expenses incurred by the Bank in respect of that subsequent sale also needed to be met by the petitioner. There is also a third ground of objection raised in course of arguments by Sri R. Chandranna, learned Counsel for respondents 3 and 4. It is this. When the Bank thus sought to resell the property, the petitioner issued a press statement to the effect that the purchaser will not get the original documents. This had adversely affected the Bank in getting as many prospective buyers as the Bank would have otherwise got. It is for these reasons that the Bank insisted on the petitioner to pay a sum of Rs. 2,35,881.50. Aggrieved by the same, the petitioner has approached this Court under Articles 226 and 227 of the Constitution.
2. At the outset, Sri R. Chandranna, learned Counsel for respondents 3 and 4 submits and rightly in my opinion that respondents 3 and respondent 4, namely the Co-operative Bank concerned and its Branch at Chitradurga, are not 'State' within the meaning of Article 12 of the Constitution, and, therefore, are not amenable to writ jurisdiction under Article 226 of the Constitution. There is absolutely no doubt at all that respondents 3 and 4 are not amenable to writ jurisdiction. What Sri K.K. Vasanth, learned Counsel for the petitioner submits is that if the petitioner is held entitled to a particular relief and if that relief can be granted only against respondents 3 and 4 and not against the other two respondents herein, then the writ petition needs to be dismissed as not maintainable; but, where the petitioner is found entitled to certain relief and where that relief can be granted against one or the other of respondents 1 and 2 who are amenable to writ jurisdiction, then, merely because as earlier claimed, the relief cannot be granted against respondents 3 and 4, the entire writ petition should not be dismissed. I agree with this submission. As would be presently seen, the petitioner is entitled to a particular relief that needs to be given by way of giving direction to the respondents 1 and 2. If so, the mere fact that respondents 3 and 4 are not amenable to writ jurisdiction would not come in the way of granting relief to the petitioner in this writ petition.
3. As said earlier, out of large extent of the property that had been mortgaged to the Bank by way of deposit of title deeds, only a portion was sold and the decree was fully satisfied. Thereafter, there was no reason for the decree-holder-Bank not to return the documents of title to the mortgagor. However, the Bank still wants to put conditions for so returning the documents. If the said conditions are valid in law, then, of course, the mortgagor has to satisfy those conditions also. But, if the said conditions are not tenable in law, I do not see how any consequence of returning the documents of title on the decree being satisfied can be avoided by putting forth untenable conditions. It therefore becomes necessary to examine the validity of each of the objections that the Bank has raised.
4. The first objection is that, it is the responsibility of the petitioner to meet the expenses of registration also in respect of the property purchased by the Bank in the sale in execution of the award. If we look to clause (i) of sub-rule (2) of Rule 38 of the Karnataka Co-operative Societies Rules, 1960 ('Rules' for short), it would indicate that it is the purchaser who is required to pay the amount required for the general stamps for the Sale Certificate. No obligation is cast on the judgment-debtor to meet the expenses of registration also. The contention urged on behalf of the Bank in this regard therefore is untenable.
5. The second objection is that the Bank was required to sell the property again and the expenses incurred in that regard also need to be met by the petitioner. Petitioner did not ask the Bank in the first instance to purchase the property. It was on the Bank's own volition that it purchased the property. When it subsequently sold it, it was not because the petitioner asked the Bank to sell it, but the Bank itself thought that the property being a non-banking asset, it should not hold on to it. Responsibility for none of these acts on the part of the Bank can be laid at the doors of the petitioner. For everything, the Bank itself was responsible. Therefore, the Bank could not have insisted upon the petitioner to meet the expenses relating to second sale also.
6. The third objection that the Bank has put forth is that because there were no bidders in the first instance, the Bank had to purchase the property, and because it could not hold on to the property on account of the property being non-banking asset, it had to sell the property, and, because a press statement was issued by the petitioner, even for the second sale, no proper price was fetched, as a result of which, the Bank stood to lose heavy sum. First of all, in the first sale, the Bank was not obliged to purchase the property at all. Rule 38-A of the Rules took care of the situation where any property could not be sold for want of buyers. In spite of the said Rule 38-A, if the Bank still went ahead and purchased the property, it is not open to the Bank to now say that it did so in order to do favour to the petitioner. Secondly, it is true the petitioner had given a press statement. But it is not open to the Bank to say that the proper price could not be fetched on account of the said press statement. The Bank itself had purchased the property for Rs. 15,08,092/- in the first sale, whereas in the next sale, it stood to gain by about Rs. 7,000/- inasmuch as, the price that the property fetched in the second sale was Rs. 15,15,000/-. If the Bank were to now contend that the property was worth much more than Rs. 15,15,000/-, then it was an act of mala fides on its part when it purchased the property for Rs. 15,08,092/- in the first instance. An institution like the Industrial Co-operative Bank should not take such contentions.
7. Thus, none of the conditions that the Bank has put forth for not returning the documents of title are legally tenable. If that is so, the Bank is duty-bound to return the documents of title to the petitioner. However, the Bank cannot be issued any writ or direction under Article 226 of the Constitution in these proceedings, because the Bank is not amenable to writ jurisdiction. That does not however mean that the petitioner should be driven to a separate proceeding to seek return of documents of title. So far as the endorsement for return of documents of title is concerned, we have now found that the petitioner is entitled for such return. Once that finding is given by this Court, it would only be an empty formality to drive the petitioner to initiate another proceeding against the Bank for return of documents of title. At the same time, the fact that the Bank is not amenable to writ jurisdiction also cannot be lost sight of. In these circumstances, I am of the opinion that the writ petition being not only against the Bank but also against the Registrar of Co-operative Societies and the Assistant Registrar of Co-operative Societies, the said two officers being amenable to writ jurisdiction, relief can be granted by giving necessary direction to them. As will be presently seen, duty is cast on respondents 1 and 2 to see to it that the documents of title are returned to the petitioner on the awards being fully satisfied. Therefore, the said officers need to be given direction in that regard.
8. The sale is under Rule 38 of the Rules. Clause (1) of sub-rule (2) of Rule 38 of the Rules provides that where a decree-holder purchases the property, the purchase money and the amount due under the decree shall be set off against one another, and the Sale Officer shall enter up satisfaction of the decree in whole or in part. Sri R. Chandranna, learned Counsel for the Bank submits that all this provision requires is for the Sale Officer to enter up satisfaction of the decree in whole or in part, and nothing more is required to be done by him. It would be difficult to agree with this submission, because sub-rule (3) of Rule 38 of the Rules would clearly state as to how the duties of the Sale Officer do not end by merely recording full satisfaction of the decree. Where, for example, the execution does not reach the stage of sale but that the judgment-debtor, prior to sale, pays the entire amount in full satisfaction of the decree within the meaning of sub-rule (3) of Rule 38 of the Rules, a duty is cast upon the Sale Officer to forthwith release the property after cancelling the order of attachment, if any. If the duty of the Sale Officer under Rule 38(2)(1) of the Rules were to end in the way Sri R. Chandranna, learned Counsel for the Bank submits, then, there should be no further duty cast upon the Sale Officer under Rule 38(3) when the judgment-debtor pays the entire amount of sale. Even after such payment of the entire decretal amount, Rule 38(3) requires that the Sale Officer should proceed to release the property after cancellation of the order of attachment, if any. Thus, the Sale Officer is still duty-bound to do such other acts as are necessary for the judgment-debtor to have his property freed from anything to do with the decree, namely whether it is attachment or mortgage. That is how, under Rule 38(3), the Sale Officer is required to release the property after cancelling the order of attachment. Therefore, I have no hesitation to hold that even where the decree-holder purchases the property and the purchase money and the amount due under the decree is set off against one another, the duty of the Sale Officer under Rule 38(2)(1) of the Rules does not end merely by entering up satisfaction of the decree in whole or in part, but his further duty is to see to it that the documents of title are returned to the judgment-debtor and the property is freed from encumbrance, in this case the encumbrance being mortgage by deposit of title deeds. Of course, it is not in all cases that the judgment-debtor will be entitled to return of the documents. But, in a case like this where large extent of property is subject to mortgage by deposit of title deeds and where a portion of it is sold, while the purchaser gets Sale Certificate in respect of the property that he purchased, the original owner/mortgagor has to get back his documents of title in order to free the remaining portion of the property from encumbrance, namely that of mortgage by deposit of title deeds. It is for this reason that he needs to get back the documents. In my opinion, it is the duty" of the Sale Officer to see to it that such return of documents is done.
9. The 'Sale Officer', as the definition under Rule 2(h) of the Rules would show, is none other than an officer empowered by the Registrar. He thus acts as a representative of the Registrar. What the Sale Officer is thus obliged to do in law, the Registrar must be equally held obliged to do in law. The Registrar being the first respondent herein and the Assistant Registrar being the second respondent herein, there should be no obstacle in the matter of issuing a writ of mandamus to them to do this act, namely to see to it that the documents are returned to the petitioner. It is not as though the Registrar of Co-operative Societies is helpless in this regard, and it is not as though he will not be in a position to obey the writ of mandamus so issued. Since the duty of seeing to it that the documents of title are returned to the petitioner, is a duty to be performed by the Registrar through the Sale Officer under the Karnataka Co-operative Societies Act, 1959 ('the Act' for short) and the Rules, the Registrar, in order to perform that duty, is entitled to give a direction to the Co-operative Bank in that regard. The direction that the Registrar so gives to the Bank will be a direction under the Act and the Rules within the meaning of clause (c) of sub-section (8) of Section 29-C of the Act. If the Bank fails to comply with the direction so issued by the Registrar, the Members of the Committee of the Bank would be subjecting themselves to disqualification under Section 29-C(8)(c) of the Act, though an order of disqualification shall have to be passed after affording them an opportunity of being heard. The Members of the Committee, therefore, would thus be duty-bound to comply with the direction of the Registrar. Such disobedience to the directions of the Registrar will also entail supersession of the Committee under Section 30(1)(b) of the Act. While this is the position so far as the Members of the Committee are concerned, the position of the Chief Executive of the Bank is no different. Section 29-G(4) of the Act inter alia provides that the Chief Executive shall perform his duties as specified therein subject to the general supervision and control of the Committee. When the Committee is given direction by the Registrar to return the documents to the petitioner, the Committee in turn can direct the Chief Executive to do necessary ministerial act. The Chief Executive will be duty-bound to carry out that direction of the Committee because he has to function under the general supervision and control of the Committee. Looked at in this manner, it would not be absolutely necessary to drive the petitioner to seek his remedies by way of another proceeding before another forum after this Court finds that the Bank is legally bound to return the documents. I am of the opinion that necessary direction need be given to respondents 1 and 2 themselves who in turn will act as indicated above.
10. Petition is therefore allowed. Respondents 1 and 2 are directed by a writ of mandamus to take necessary steps in accordance with law and in the light of the discussion made above to see to it that the petitioner gets back his documents of title along with discharge memo from respondents 3 and 4. Respondents 1 and 2 are granted three months time from the date of receipt of a certified copy of this order, within which they shall see to it that the petitioner gets back his documents.