Karnataka High Court
Muniyamma vs M/S. Karnataka Electricity Board ... on 31 October, 2023
Author: K. Natarajan
Bench: K. Natarajan
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF OCTOBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE K. NATARAJAN
REGULAR FIRST APPEAL NO.312 OF 2021
BETWEEN:
SMT. MUNIYAMMA
W/O SRI KAVERAPPA,
SINCE DECEASED BY LRS,
1 . Y. G. RAMAKRISHNA
AGED ABOUT 61 YEARS,
S/O LATE KAVERAPPA,
NO.209, 7TH CROSS,
A.K.COLONY, NEAR GANESH TEMPLE,
KAVERAPPA BUILDING, YAMALUR,
BENGALURU - 560 037.
2 . MUNIRATHNA
AGED ABOUT 60 YEARS,
W/O THYAGARAJ,
R/AT NO.5, 19TH CROSS,
KAVERAPPA BUILDING,
RAMESH NAGAR,
BENGALURU - 560 037.
3 . GOWRAMMA
AGED ABOUT 58 YEARS,
W/O Y.GOPAL,
R/AT NO.209, 7TH CROSS,
A.K.COLONY, NEAR GANESH TEMPLE,
KAVERAPPA BUILDING,
YAMALUR,
BENGALURU - 560 037.
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4 . K. RAMAMURTHY
AGED ABOUT 55 YEARS,
S/O LATE KAVERAPPA,
R/AT NO.5, 19TH CROSS,
KAVERAPPA BUILDING,
RAMESH NAGAR,
BENGALURU - 560 037.
... APPELLANTS
(BY SRI. S. KALYAN BASAVARAJ, AND
SRI. LOKESH RAO B.S., ADVOCATES)
AND:
1. M/S. KARNATAKA ELECTRICITY BOARD
EMPLOYEES COOPERATIVE SOC. LTD.,
HAVING ITS REGISTERED OFFICE AT
ANANDA RAO CIRCLE, RACE COURSE ROAD,
BENGALURU - 560 009,
REPRESENTED BY ITS SECRETARY.
2. SRI. K.P.CHAMPAKADHAMASWAMY
AGED ABOUT 63 YEARS,
S/O LATE PUTTASWAMY,
R/AT NO.161/64, 8TH MAIN,
MALLESHWARAM,
BENGALURU - 560 003.
3. M/S. GOLDEN GATE PROJECTS
A PARTNERSHIP FIRM HAVING ITS REGISTERED,
OFFICE AT NO.96, 1ST FLOOR, 4TH B BLOCK,
KORAMANGALA EXTENSION,
BENGALURU - 560 034,
REPRESENTED BY ITS PARTNER.
4. M/S KEYA HOOMES PVT LTD.,
A PRIVATE LIMITED COMPANY INCORPORATED,
UNDER THE PROVISIONS OF THE COMPANY'S ACT,
HAVING ITS OFFICE AT NO.17,
REGENT COURT, 17, 80 FEET ROAD,
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NEW FRIENDS COLONY,
KORAMANGALA,
BENGALURU - 560 034.
... RESPONDENTS
(BY SRI. K.S. KALLESHAPPA, ADVOCATE FOR R1;
SRI. MOHAMMAD NASIRUDDIN, AND
SRI. SIDDHARTH S BIJOOR, ADVOCATES FOR R3;
VIDE ORDER DATED 13.09.2021, SERVICE OF NOTICE TO
R2 IS HELD SUFFICIENT;
SRI. VENKATESH R BHAGAT, ADVOCATE FOR R4)
THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION
96 R/W ORDER XLI RULE 1 OF THE CPC, AGAINST THE ORDER
DATED 17.03.2021 PASSED ON I.A.NO.3 AND PRELIMINARY
ISSUE NO.7 IN O.S.NO.1537/2017 ON THE FILE OF THE I
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU
ALLOWING THE I.A.NO.3 FILED UNDER ORDER 7 RULE 11 (a)
AND (d) OF CPC FOR REJECTION OF PLAINT.
THIS REGULAR FIRST APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 11.10.2023, THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:
JUDGMENT
This appeal is filed by the appellants-plaintiffs under Section 96 of CPC for setting aside the order dated 17.03.2021 on I.A No.3 filed under Order VII Rule 11 (a) and (d) of CPC, in O.S.No.1537/2017 passed by the I Additional City Civil and Sessions Judge, Bengaluru, whereby the trial Court has allowed the I.A. and rejected the plaint.
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2. Heard the arguments of learned counsel for the appellants and learned counsel for respondents.
3. The appellants are the plaintiffs and respondent Nos.1 to 3 are defendant Nos.1 to 3 before the trial Court. The rank of the parties is retained for the sake of convenience. Respondent No.4 - developer who is impleaded would join with respondent No.3.
4. The case of the plaintiffs before the trial Court is that the plaintiffs filed a suit for permanent injunction restraining defendants from interfering with suit schedule property of the plaintiffs and restraining the defendants from alienating northern half of land bearing Sy. No.30/2, Kasavanahalli village, Bangalore East Taluk, formerly Bangalore South Taluk, measuring 3 acres 25 guntas, bounded on East by Basappa and other's land, West by Narasamma and Chenni Reddy's and Gundappa's land, North by remaining portion of the same survey number and South by Chikkabalappa's land (hereinafter referred to 5 as schedule 'A' property). This schedule 'A' property is purchased by plaintiffs' mother deceased Muniyamma from one B.R. Muga Reddy s/o. late M. Rama Reddy under sale deed 14.09.1964 registered in the office of the Sub- Registrar, Bangalore city, and she was the absolute owner of the said property.
5. The further case of the plaintiffs is that the said Muniyamma also purchased southern half of land bearing Sy. No.30/2, Kasavanahalli village, Bangalore East Taluk, formerly Bangalore South Taluk, measuring 3 acres 25 guntas, bounded on East by Basappa's land, West by Narasamma's land and North by Thoti Inamthi land and South by remaining portion of the same survey number (hereinafter referred to as suit schedule 'B' property). the suit schedule 'B' property was purchased from one Sunchappa, s/o. late Puttaiah, on 24.05.1971 of the Sub- Registrar, Bangalore city, and she was the absolute owner of the said property.
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6. The defendant No.1 is M/s. Karnataka Electricity Board Employees Cooperative Society Limited (hereinafter referred to as 'Society'), represented by defendant No.2, who is the Secretary of defendant No.1, entered into a sale agreement dated 24.01.1992 with the plaintiffs with the object of forming a residential layout for its members in the schedule properties for total sale consideration of Rs.9,25,000/-. The time stipulated for completion of sale transaction was 9 months. Pursuant to the said agreement, the plaintiff applied for conversion of land, which was obtained. Due to certain technicalities, the sale could not be executed within 9 months. As such, two more agreements in respect of schedule A and B properties were registered on 29.10.1992 and another agreement on dated 28.10.1992 in the office of Sub-Registrar regarding A and B schedule properties, on continuation of earlier agreement dated 24.01.1992.
7. The further case of the plaintiffs is that General Power of Attorney has been executed on 29.10.1992 in 7 respect of schedule 'A' property, in favour of defendant No.2 as representative of defendant No.1. Another General Power of Attorney dated 28.10.1992 was executed in respect of schedule 'B' property. As per sale agreement dated 29.10.1992, the balance sale consideration payable was Rs.1,19,000/- to be paid by defendant No.1 to the plaintiffs after all the legal formalities completed. Similarly, under the agreement dated 28.10.1992, the balance consideration payable was Rs.25,000/- to be paid by defendant No.1 to the plaintiffs after all the legal formalities completed. It is further alleged that the plaintiffs requested defendant Nos.1 and 2 for completing the legal formalities but the defendants kept on postponing the issue for one or the other reasons. Defendant No.3 tried to interfere with the plaintiffs' possession on 05.04.2016. Being suspicious, the plaintiffs enquired into the matter and applied for E.C. in respect of the schedule properties and it was found that defendant No.2 being the GPA holder of defendant No.1, sold the 8 schedule properties to defendant No.3 vide sale deed dated 28.05.2002, by impersonating the deceased plaintiff before the Sub-Registrar office. The photograph affixed on the document is altogether different from that of the photograph of mother of the plaintiffs. Therefore, the plaintiffs filed a private complaint under Section 200 of Cr.P.C. read with Sections 420, 416 and 506 of IPC and Section 3(x) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989 (for short 'SC/ST (POA) Act') and the investigation is pending.
8. It is further alleged that the plaintiffs' mother approached defendant Nos.1 and 2 once again and questioned about their misconduct, but the defendants neglected and ill treated her and hence, the GPAs dated 28.10.1992 and 29.10.1992 have been revoked on 07.02.2017 and the same was informed to the defendants. Defendant Nos.1 and 2 do not have any right and title over the properties and the plaintiff's mother was not the signatory to the sale deed executed in favour of defendant 9 No.3. Defendant Nos.1 and 2 colluded with defendant No.3 and played fraud on the plaintiffs. On 24.02.2017, the defendants again tried to interfere with the schedule properties. Hence, the plaintiffs filed the suit seeking cancellation of agreements of sale dated 24.01.1992, 29.10.1992 and 28.10.1992 and to declare that the sale deed dated 28.05.2002 executed by defendant No.2 in favour of defendant No.3 is not binding on the plaintiffs and also to grant permanent injunction against the defendants not to interfere with the peaceful possession and enjoyment of the plaintiffs schedule properties.
9. In pursuance to summons, defendant No.3 appeared through its counsel and filed written statement. It is contended that the suit is not maintainable as no notice under Section 125 of Karnataka Co-operative Societies Act, 1959 (hereinafter referred to as 'Societies Act') was issued to defendant No.1 prior to filing of the suit which is a statutory notice to be issued and, therefore, the suit is to be dismissed in limine. The relief sought by the 10 plaintiffs is for canceling agreements of sale. Admittedly, defendant No.1 is Society and without a notice under Section 125 of the Societies Act, the suit cannot be filed. It is contended that the plaintiff already sold the property by power vested with GPA given to the Society. She has received the entire sale consideration of the schedule properties and denied the other contentions made in the plaint as false. However, the allegation that of the plaintiffs that the plaintiff was impersonated by affixing photograph of some other lady while execution of the sale deed, were all denied by the defendant. It is binding on the agreement of sale and GPA executed by plaintiff. Defendant Nos.1 and 2 already acted upon the GPA and the action of the GPA holder is binding as the plaintiff. Therefore, defendant No.3 is having right, title and interest over the schedule properties and possession has remained with the defendant. Therefore, the contention of the plaintiff that she is in possession of the schedule properties, is not correct. It is further contended that 11 there was reconstitution of partnership firm of M/s. Golden Gate Projects in so far as S. Martin and his wife Mrs. M. Leema Rose have left. The declaration has also been executed by Muniyamma, her husband and her children and they have accepted execution of all documents and khatha also stands in the name of defendant No.3. Defendant No.3 not only obtained conversion order, but got converted the land from agricultural to non agricultural land. The plaintiff-Muniyamma also executed gift deed in favour of her son Ramamurthy. In the light of the sale deed dated 28.05.2002 and the decree passed in O.S. No.25398/2008, the said gift deed, was null and void as Muniyamma did not retain any interest or title over the property after execution of GPA. Hence, prayed for dismissing the suit.
10. Defendant No.1-Society also appeared through its counsel and filed written statement stating that the plaint is not maintainable either in law or on facts and the same may be dismissed in limine. The suit is bad and 12 prayed for dismissal of the suit for non joinder of necessary parties. The suit is filed only intention to harass the defendant No.1. Defendant No.1 is the Society registered under the Co-operative Societies Act. Defendant No.1 represented through its Secretary- defendant No.2 who has collected crores of rupees from the members and the said amount is given to landlords M/s. Vinayaka Enterprises. Defendant No.1 further contended that defendant No.2 while serving as Honorary Secretary and Executive Director from 1991-92 to 2007- 08, the other Board of Directorates were managing the Society. The Society was intended to purchase the property declaring that the property has been purchased. Defendant No.2 was elected as board of Director of the Society. Defendant No.2 and M/s. Vinayaka Enterprises entered into Memorandum of Understanding (MOU) on 27.11.1993 with defendant No.3-developers and the Memorandum of Understanding was represented by Honorary Secretary of defendant No.1. M/s.Vinayaka 13 Enterprises also represented through Memorandum of Understanding. Both have first party of the one part in the said Memorandum of Understanding. As per the MOU and agreement dated 09.09.1991, the party of the first part with the help of M/s. Vinayaka Enterprises has made all arrangements to procure the land and consideration has been paid to the owners. The aim of the Society is to form the layout and allot to its members. Due to financial technicalities, the sale deed was executed in favour of defendant No.3. It is further contended that defendant No.2 stated defendant No.1 that it fixed loan was borrowed from BD and BRDCC Bank Ltd. for the purpose of acquisition of schedule properties.
11. It is further alleged that as per the annual general body meeting dated 10.10.1998, it was resolved to sell the schedule properties and as per the board meeting dated 16.08.2001, the resolution dated 10.10.1998 was reaffirmed. It is further alleged that as per board resolution dated 18.02.202, defendant No.2 has not 14 obtained permission from concerned authority and sold the schedule properties to the defendant No.3 illegally. The defendant No.2 has obtained loan for the purpose of clearing the loan from BD and BRDC Bank, but defendant No.2 has not cleared the said loan. Hence, the sale deed executed by defendant No.1 in favour of defendant No.3 is void. There is no provision in by-laws for alienating the property to outsiders. Defendant Nos.2 and 3 have acted as ultra vires and in excess of their powers. As such, the sale of the schedule properties by the defendant No.2 in favour of defendant No.3 is against the law. The property was sold as per the guideline value though the market rate was more than Rs.5 crores. The defendant No.2 has not utilized the sale proceeds to the Society. Now, defendant No.1-Society is with new set of office bearers. Permission for selling the property or authorization given by AGM was misused and fraud committed by members cheating the Society and for irregularities committed by defendant No.2. A complaint has been filed by defendant No.1 in the 15 High Ground Police station against defendant No.2, which has been transferred to COD and the COD filed charge sheet before the Magistrate. It is also contended that defendant No.2 has violated the provisions of the Act and executed the sale deed in favour of defendant No.3, which is illegal. Defendant No.1 denied all the averments made in the plaint and prayed for dismissing the suit.
12. Based upon the pleadings, the trial Court framed ten issues which are as under:
"1. Whether the plaintiff proves that she is the absolute owner and in possession of the suit properties through the registered sale deeds dated 14.9.1964 and 24.5.1971?
2. Whether the plaintiff proves that the registered sale agreement dated 24.1.1992, 29.10.1992 and 28.10.1992 are liable to be cancelled?
3. Whether the plaintiff proves that the registered sale deed dated 28.5.2002 16 executed by defendant no.2 in favour of the defendant no.3 is not binding on her?
4. Whether the plaintiff proves that alleged interference from the defendants?
5. Whether the defendants prove that the suit is bad for nonjoinder of necessary parties?
6. Whether the defendants prove that the suit is barred by limitation?
7. Whether the defendants prove that the suit is not maintainable, since the plaintiff has not complied the provisions of Karnataka Cooperative Societies Act?
8. Whether the defendant no.3 proves that he is a bonafide purchaser?
9. Whether the plaintiff is entitled to the relief of declaration and Permanent Injunction
10. What Order or Decree?"
13. Defendant No.3 also filed an application under Order VII Rule 11(a) and (d) of CPC to reject the plaint by taking the contention that there is no cause of action and 17 the suit is barred by limitation. It is further contended that there is no statutory notice under Section 125 of the Societies Act issued as against defendant No.1 prior to filing of the suit. Therefore, without compliance of notice, the suit is barred by limitation and bad in law. It is further contended that the plaintiffs' suit for the execution of sale deed dated 28.05.2002, the relief claimed is barred under Article 58 of Limitation Act and the suit is not maintainable without seeking the relief. Hence, prayed for rejecting the plaint.
14. The plaintiffs filed statement of objections contending that the application is not maintainable. The cause of action arose as stated in para 16 of the plaint. Order VII Rule 11(a) of CPC is not applicable for the plaint. The pleadings clearly disclose that there is fraud and therefore, the limitation is not applicable. The notice under Section 125 of the Societies Act is not applicable to the present case. It is contended that GPA is admitted in the 18 sale deed dated 28.05.2002. Looking to all the angles, the plaint cannot be rejected.
15. After hearing the arguments, the trial Court framed two points as under:
Point No.1 : Whether the plaint is liable to be rejected under Order VII Rule 11(a) and
(d) as prayed by defendant No.3 in I.A.No.3 ?
Preliminary Issue (No.7) : Whether the defendants prove that the suit is not maintainable since the plaintiff has not complied the provisions of Karnataka Cooperative Societies Act ?
16. Preliminary issue No.7 was treated as paramount issue and finally, allowed the application and rejected the plaint. Being aggrieved by the same, the plaintiffs are before this court.
17. Heard the arguments of learned counsel for respondent No.1. Respondent No.2 served and unrepresented. Respondent No.3 appeared through the 19 learned advocate and respondent No.4 also appeared through learned advocate and Heard then.
18. Learned counsel for the appellant has contended mainly on two grounds in respect of limitation stating that there is no limitation applicable and there is no need of issuing notice under Section 125 of the Societies Act, the trial Court committed error in rejecting the plaint. The suit is filed for declaring that the sale deed is not binding as there was fraud committed by defendant No.2 by impersonating the plaintiff and executed the sale deed. Therefore, the Limitation Act is not applicable to the case on hand. Therefore, rejecting the plaint on the ground of suit is barred by limitation, cannot be accepted. The learned counsel further contended that the notice under Section 125 of the Societies Act is not required as there was transaction between defendant Nos.1 and 2 and Defendant No.3. Defendant No.1 did not raise any objection in written statement regarding non issuing the notice, where as defendant No.3 raised the question of 20 issuing notice to defendant No.1. Therefore, it cannot be accepted. The execution of sale deed by defendant No.2 to defendant No.3 will not attract Section 125 of the Societies Act, their act not touches the business and management of the Society. Therefore, the order of the trial Court is liable to be set aside.
19. Per contra, learned counsel for respondent No.1-defendant No.1 has contended that the property was purchased by defendant No.1-Society represented by defendant No.2, but subsequently, defendant No.2, by acting under the GPA, sold the property to defendant No.3. The object of the Society was to purchase the land, form the sites and sell it to its members, therefore, the notice is required. Further, it is contended that defendant No.1 has taken the contention in the 1st paragraph of written statement itself that the suit is not maintainable either in law or on facts. Hence, prayed for dismissing the appeal.
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20. Per contra, learned counsel for defendant No.3 has seriously objected the appeal and contended that the defendant No.2 being the Secretary representing defendant No.1-Society, has purchased the property, on behalf of defendant No.1, from the appellants for valuable consideration. Defendant No.1 given GPA given in the name of defendant No.2 and subsequently, the GPA was acted upon. Even if the appellants die, the GPA will not die. As the GPA coupled with interest, defendant No.3 paid the entire sale consideration. Therefore, once defendant No.2 purchased the property on behalf of defendant No.1- Society, it is for the purpose of forming the layout and selling to its members which amounts to business of the Society and after purchasing the property. Due to financial crisis in the defendant No.1-Society, the AGM (Annual General Body Meeting), the Society was authorized and permitted to execute the sale deed in favour of defendant No.3 and in turn, the defendant No.3 purchased the property. Therefore, for the purpose of filing the suit, 22 statutory notice under Section 125 of the Societies Act is mandatory and without notice, the suit is not maintainable. Hence, supported the order of the trial Court.
21. Learned counsel for respondent No.3-defendant No.3 also contended that there is no fraud played by defendant No.2. Once GPA is executed by the appellant, therefore need not required to come to the Sub-Registrar office. The defendant No.2, as GPA holder for the defendant No.1-Society and representing the defendant No.1-Society, sold the property and he has affixed his signature on behalf of plaintiff and therefore, there is no impersonation or fraud committed by the 2nd defendant. Therefore, the limitation Act for filling the suit or arises. It is further contended that the plaintiff also filed complaint to the Director of Civil Rights, where they have given report stating that there is no fraud committed by the defendant No.2. The learned counsel further contended that GPA coupled with interest and it was acted upon by the 2nd defendant by selling the property to the 3rd 23 defendant in the year 1999 itself. The sale deed was executed in the year 2002, but the suit was filed in the year 2007. The suit was utterly barred by law. Hence, he has contended that the trial Court has rightly rejected the plaint and prayed for dismissing the appeal.
22. Having heard the arguments and on perusal of the records, the points that arise for my consideration are:
"1) Whether the statutory notice under
Section 125 of the Societies Act is
mandatory for maintaining the suit as
against defendant No.1-Society?
2) Whether the suit is barred by law of
limitation?
3) Whether the order of the trial Court calls
for interference?"
23. Point No.1 - The learned counsel for the appellants has strenuously contended that the notice under Section 125 of the Societies Act is not necessary as the sale deed between the 2nd and 3rd defendant is not 24 touching the affairs or management of the Society, therefore, the suit is maintainable. On the other hand, the respondent Nos.1 and 3 have taken the contention in the written statement as the suit is not maintainable for non issuance of notice under Section 125 of the Societies Act. Respondent No.3 who is defendant No.3 in the trial Court has taken the contention that the Society has purchased the property from the plaintiff for valuable sale consideration under the agreement of sale and also GPA coupled with interest and due to some financial crisis, the Society is unable to form the layout and chosen to sale the same to the 3rd defendant. Accordingly, it was sold after the permission of the Annual General Body Meeting of the members of the Society. Purchasing the property by the 1st defendant-Society which was represented by the 2nd defendant for the purpose of forming the layout and allotting to its members and it was sold to the 3rd defendant which is nothing but affairs, business and management of the Society, therefore, the notice under 25 Section 125 of the Societies Act is mandatory. In support of his contention, learned counsel for respondent No.3 relied upon the judgment of the Full Bench of the High Court, wherein the plaintiff has also examined. In this regard, the plaintiff also produced the judgments and respondent also filed judgments in this regard. For convenience, Section 125 of the Co-operative Societies Act is read as under:
"125. Notice necessary in suits.- No suit shall be instituted against a co-operative society or any of its officers in respect of any act touching the constitution, management or the business of the society until the expiration of two months next after notice in writing has been delivered to the Registrar, or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims; and the plaint shall contain a statement that such notice has been so delivered or left."
24. The Co-ordinate Bench of this Court in the case of the Arogyanagar Co-operative Housing Society 26 Limited and Another vs. Fakiragouda and Another reported in ILR 2004 KAR 1445 has held as under:
"KARNATAKA CO-OPERATIVE SOCIETIES ACT, SECTION 125 - Issuance of notice whether a must when suit filed against society - Membership of a society whether an important issue in such cases.
HELD - Provision of Section 125 of the Act are attracted since the relief sought for by the plaintiffs against the society relates to the businesses of the society. Any person seeking a relief against the society which touches the business of the society, such person being a member or no member is of no relevance."
25. In another judgment in the case of Narasegowda vs. HMT Employees House Building Co- operative Society Ltd reported in ILR 1992 KAR 3564, the Co-ordinate Bench of this Court has held at paragraph Nos.12 and 13 are as under:
"12. For the reasons stated hereinabove, I am of the view that the present suit is barred by the provisions of Section 118 of the Co-27
operative Societies Act. Once when it is held that the dispute like the one which has presented itself for consideration is a dispute falling under the provisions of Section 70 of the Act, it would follow as a matter of logical corollary that the provisions of Section 118 of the Act would operate as a bar to the Civil Court to decide the same. Incidentally, the suit would attract the provisions of Section 125 of the Act also. Under these circumstances, it is clear that the suit is barred by law, that is to say, by reason of Section 118 R/W Section 70 of the Act. Point No. 1 is answered accordingly.
13. In view of my finding on Point No.1, Point No.2 does not fall for consideration. It is clear that once when it is held that the suit is barred under some law, the question of giving findings on the other issues does not arise at all. Therefore, the findings given on the other issues do not survive and as such they do not survive for consideration in this Appeal also and the plaint is liable to be rejected on that count alone."28
26. The same view has been taken by the Division Bench of this Court in the case of the Karnataka Handloom Development Corporation Limited vs. Mandya District Central Cooperative Bank Limited in RFA 445/2001.
27. The another judgment of this Court in the case of Dakshayanamma vs. Daivajna Credit Co-operative Society and others in RFA No.1919/2017 has relied upon the judgment of the Full Bench of this Court in the case of The Krishi Mattu Ksheera Utpadaka Vividhoddesha Sahakari Sangh Niyamit Bakkal and another vs. Sohanlal reported in AIR 1993 KARNATAKA 20 and has held at paragraph No.16 which is as under:
"16. Learned counsel for the appellant has relied upon the judgment of the Full Bench of the High Court of Karnataka in the case of The Krishi Mattu Ksheera Utpadaka Vividhoddesha Sahakari Sangh Niyamit Bakkal and another vs. Sohanlal reported 29 in AIR 1993 KARNATAKA 20, where the Full Bench of this Court has considered the notice under Section 125 of Co-operative Societies Act which is read as under:
In the light of the foregoing dictum of the Supreme Court there can possibly be no doubt at all that the expression 'any act' appearing in Sec. 125 is referable not merely to an illegal omission but also to an omission simpliciter. In the circumstance it behoves on our part to fall in step with the views of the apex Court as aforesaid and in the light of the same to hold that the expression 'any act' referred to in Sec. 125 is not confined to illegal omissions alone but also covers a mere omission simpliciter. In fine our answers to the questions formulated are:
(1) (1) Notice under Section 125 is mandatory, where the act in question is with reference to the society. Such notice is also necessary if the 'act' in question is with reference to an officer of the society and the 'act' or omission complained of relates to the Constitution, management or business of the society.30
(ii) Notice is also mandatory where the 'act' in question covers both the society and the officer.
(2) The expression 'any act' referred to in Sec.
125 of the Act is not confined to illegal omissions alone but also covers a mere omission simpliciter.
5. While parting we must hold that in the light of our views herein, the decision in the case of Ankola Urban Co-operative Credit Bank and in the Bank of Citizens, Belgaum case as also the decision in Somwarpet and Agricultural Produce Marketing Co-operative Society Ltd. are no longer good law. The matter will now go back to the Division Bench for disposal in the light of the findings recorded by under Section herein as aforesaid."
28. This Court in the case of Dakshayanamma stated supra by following various judgments has considered that Section 125 of the Societies Act is necessary when the suit filed against the Society is touching the affairs and management of the Society. 31
29. Now, on perusal of the averments made in the written statement by both 1st defendant and 3rd defendant including the plaintiff, it clearly reveals that the land was purchased by the 1st defendant-Society for the purpose of forming the layout and allotting the same to its members. Therefore, the agreement was entered into between the plaintiff and 1st defendant and 2nd defendant subsequently for the various reasons, the property was sold by the Society in favour of the 3rd defendant. The sale deed produced by the plaintiff and the respondent clearly reveals, the respondent No.2 sold the suit schedule property to the 3rd defendant on behalf of the 1st defendant-Society and the respondent No.3 also produced and averred in the written statement that there was permission granted by the AGM of the Society for selling the property. The sale deed dated 28.05.2002 executed by the Society representing the Muniyamma-Appellant (deceased plaintiff) who was the fifth vendor where the 1st defendant-Society represented by 2nd defendant- 32 Champakadhamaswamy as a Secretary and the Vinayaka Enterprises who was the middleman for having purchased the property has executed the sale deed in favour of the 3rd defendant-Golden Gate Projects including the suit schedule property and other properties. In the sale deed at page No.13, it is clearly mentioned that Muniyamma- plaintiff was represented by the 1st and 2nd defendant as GPA holders of the plaintiff and at page No.23 of the sale deed, it is categorically mentioned that the Society by its Annual General Body Meeting held on 10.10.1998 resolved to authorise the managing Committee to sell off the property by re-affirming the decision taken by the Board meeting dated 16.08.2001 and sold the property to clear of the loan borrowed from the Bank by the Society. Therefore, the sale deed executed by the 2nd defendant on behalf of the 1st defendant as a GPA holder of the plaintiff was in order to clear the loan of the Society which was borrowed from the Private Banks, therefore, it is the affairs and touching the management of the Society and in order 33 to file the suit against the 1st defendant and the 2nd defendant, the notice under Section 125 of the Societies Act is mandatory. Admittedly, notice has been sent by RPAD or in person to the Registrar of Co-operative Societies prior to filing of the suit, therefore, without issuing notice, a statutory notice to the Registrar of Co- operative Societies filing the suit against defendant Nos.1 and 2 or defendant No.3 in respect of challenging the agreement of sale or sale deed or GPA against the Society is not maintainable without statutory notice. Therefore, the suit filed by the plaintiff without compliance of statutory notice under Section 125 of the Societies Act is not maintainable. The trial Court has considered this aspect at paragraph No.10 of the impugned order and finally dismissed the suit. There is no need for interference over the order passed by this Court on the ground that suit is not maintainable. In view of non issuing notice under Section 125 of the Societies Act, hence, answered point No.1 in favour of the defendants as against the plaintiff. 34
30. Point No.2 - As regards to the limitation, the respondent counsel has contended that the agreement of sale was executed by the plaintiff agreeing to sell the suit schedule property on 24.01.1992 by receiving the entire sale considerations except a meagre balance of Rs.1,19,000/- for 'A' schedule property and Rs.25,000/- for 'B' schedule property. The plaintiff executed the GPA coupled with interest by receiving the sale consideration. Subsequently, defendant Nos.1 and 2 were acted upon the GPA executed by the plaintiff and sold the property to defendant No.3 vide sale deed dated 28.05.2002 and the GPA once executed was coupled with interest is irrevocable GPA and it cannot be cancelled and further contended that the GPA was cancelled only in the year 2017 whereas the sale deed was executed in the year 2002, but agreement of sale and GPA was executed in the year 1992. Therefore, the suit filed in the year 2017 is utterly barred by the limitation and absolutely, there is no fraud committed by the defendant Nos.1 and 2. It is an admitted 35 fact that the agreement of sale was in the year 1992. The sale deed was executed by defendant Nos.1 and 2 in favour of defendant No.3 in the year 2002 and admittedly, the GPA was said to be cancelled by the plaintiff in the year 2017.
31. The appellant counsel filed I.A.No.3/2023 under Order XLI Rule 27 of CPC seeking permission to produce the MOU between the third and fourth respondent and also copy of the sale deeds and agreement of sale executed by the Muniyamma-Plaintiff in favour of the defendant Nos.1 and 2 and the sale deed executed by the 2nd defendant in favour of the 3rd defendant. These documents are necessary documents for considering this appeal.
32. On perusal of the sale deeds and sale deed executed by the defendant Nos.1 and 2 in favour of Defendant No.3 i.e., respondent No.3 and the cancellation of GPA dated 07.02.2017 were produced by the appellants' 36 counsel. On perusal of the same, the GPA has been cancelled only on 07.02.2017 i.e., after 15 years of execution of sale deed by defendant Nos.1 and 2 and after 25 years of the execution of GPA by the plaintiff in favour of defendant Nos.1 and 2 and the GPA produced by the appellant clearly reveals that it is a GPA coupled with interest and received the sale consideration which is irrevocable GPA.
33. The learned counsel for the appellants has contended that there was a fraud committed on the plaintiff, therefore, the limitation Act will not be applicable and in order to show the fraud was committed, it has stated the plaintiff-Muniyamma was not at all went to the Sub-Registrar Office, but defendant Nos.1 and 2 affixed the photographs of some lady and signature was forged by impersonating Muniyamma-the plaintiff. On the other hand, the same was denied by the respondent No.3 on the ground that the GPA was acted upon by the defendant No.2 on behalf of defendant No.1 and GPA holder is 37 representing, there is no necessity for the plaintiff to come physically to the Registrar Office and there is no impersonation or fraud on the plaintiff. In order to verify the same, the sale deed produced by the appellants' counsel reveals that the sale deed dated 28.05.2002 executed by the defendant Nos.1 and 2 in favour of defendant No.3 which clearly reveals that the plaintiff name was mentioned as one of the vendor at Sl.No.5. There are so many other vendors name was mentioned in the sale deeds, totally 12 vendors were represented by defendant No.1-Society and defendant No.2 as a Secretary representing the defendant No.1 and one Narasimhamurthy who is proprietor of Vinayaka Enterprises was acted upon and coordinated for the purpose of purchasing the property from the plaintiff were all executed sale deed as a GPA Holder and on perusal of 2nd and 3rd pages of the sale deed, there is no photograph of Muniyamma found or name of the Muniyamma was mentioned as a vendor who was present. 38 On the other hand, defendant No.2 represent as a GPA Holder of the plaintiff- Muniyamma and representing as the Secretary of the defendant No.1 executed the sale deed along with one Narasimhamurthy in favour of respondent No.3-Golden Gate Project which is the partnership firm represented by one S.Martin. Therefore, it is a clear case that there is no fraud committed by the defendant Nos.1 and 2 in executing the sale deed by representing as a GPA holder of the plaintiff and no where it is mentioned in the document that the plaintiff-Muniyamma was present physically and executed the sale deed. On the other hand, defendant No.2 and one Narasimhamurthy representing all the vendors as a GPA Holder on behalf of the defendant No.1 executed the sale deed. Therefore, learned counsel for respondent No.3 rightly contended that there is no fraud committed on the plaintiff in executing the sale deed. Therefore, once the sale deed is executed in the year 2002, the limitation for filing the suit for declaration under Article 58 of the Limitation Act, the suit for declaration of 39 title shall be filed within three years of right to sue accrues and seeking the said relief barred by limitation and even for cancellation of the instrument under Article 59 of the Limitation Act, three years prescribed by the limitation Act whereas suit was filed after 15 years of execution of sale deed and after 25 years of execution of GPA. Therefore, the suit is utterly barred by limitation, hence, answered the point No.2 in favour of respondent No.3 and against the appellants.
34. As regards to the another contention raised by the respondent counsel, the GPA was coupled with interest and even if GPA holder died, the GPA can be acted upon. In support of his contention, the learned counsel for respondent No.3 has relied upon the judgment of the Co- ordinate Bench of this Court in the case of Binny Mill Labour Welfare House Building Co-operative Society Limited vs. D.R. Mruthyunjaya Aradhya reported in ILR 2008 KAR 2245 is read as under:
40
"(D) SPECIFIC RELIEF ACT, 1963 SECTION 31
- Cancellation of a sale deed under - Unilateral cancellation of a sale deed by a vendor who had executed the sale deed 1 Legality of cancellation - HELD, If after execution and registration of the sale deed, the owner wants to get back the property, it has to be done by canceling the sale deed on any of the grounds which are available to him under the provisions of the Indian Contract Act. Unilaterally he cannot execute what is styled as a deed of cancellation, because on the date of execution and registration of the deed of cancellation, the said person has no right or interest in that property- FURTHER HELD, In the case of a sale deed executed and registered the owner completely loses his right over the property and the purchaser becomes the absolute owner. It cannot be nullified by executing a deed of cancellation because by execution and registration of a sale deed, the properties are being vested in the purchaser and the title cannot be divested by mere execution of a deed of cancellation. Therefore, even by consent. or agreement between the purchaser and the vendor, the said sale deed cannot be 41 annulled. If the purchaser wants to give back the property, it has to be by another deed of conveyance. If the deed is vitiated by fraud or other grounds mentioned in the Contract Act, there is no possibility of parties agreeing by mutual consent to cancel the deed. It is only the Court which can cancel the deed duly executed, under the circumstances mentioned in Section 31 and other provisions of the Specific Relief Act, 1963. Therefore, the power to- cancel a deed vests with a Court and it cannot be exercised by the vendor of a property.
35. Learned counsel for the respondents has relied upon another judgment of the Division Bench of this Court in the case of Mohammed @ Podiya vs. Assistant Commissioner reported in ILR 1993 KAR 2306 where it has held at paragraph No.5 as under:
"5. Section 202 of the Contract Act provides that 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 any express condition be terminated to the prejudice of such interest. The principle is that 42 when an agreement is entered into on a sufficient authorisation whereby an authority is given for the purpose of giving some benefit to the donee of the authority such an authority is irrevocable. An authority coupled with interest is not determined by death, insanity or bankruptcy of the principal where the agent made advances to the principal and is authorised to sell at best price and recoup advances made by him, the agency is one coupled with interest and is irrevocable. Where all the rights and liabilities under a contract were) made over by a power-of-attorney, such power is an agency coupled with interest."
36. In view of the judgments both Division Bench and the Co-ordinate Bench of this Court that once the irrevocable GPA is executed coupled with interest that cannot be cancelled and it was already acted upon by the defendant Nos.1 and 2 by selling the same. Therefore, the question of canceling or revoking the GPA after 25 years does not arise. That apart, as per the judgment of the Hon'ble Supreme Court in the case of Dahiben vs. 43 Arvindbhai Kalyaniji Bhanusali (Gajra) Dead Through Legal Representatives and Others, the Hon'ble Supreme Court has held as under:
"The plaintiffs averred in the plaint that the period of limitation commenced on 21-11- 2014, when they obtained a copy of the index of the sale deed dated 2-7-2009, and discovered the alleged fraud committed by Defendant 1. The plea taken in the plaint that they learnt of the alleged fraud in 2014, on receipt of the index of the sale deed, is wholly misconceived, since the receipt of the index would not constitute the cause of action for filing the suit. On a reading of the plaint, it is clear that the cause of action arose on the non-payment of the bulk of the sale consideration, which event occurred in the year 2009. The plea taken by the plaintiffs is to create an illusory cause of action, so as to overcome the period of limitation. The plea raised is rejected as being meritless and devoid of any truth. The conduct of the plaintiffs in not taking recourse to legal action for over a period of five-and-half years from 44 the execution of the sale deed in 2009, for payment of the balance sale consideration, also reflects that the institution of the present suit is an afterthought. The plaintiffs apparently filed the suit after the property was further sold by Respondent 1 to Respondents 2 and 3, to cast a doubt on the title of Respondent 1 to the suit property. The plaintiffs did not make any complaint whatsoever to the Collector at any point of time. The conduct of the plaintiffs is reflective of lack of bona fide.
Suhrid Singh v. Randhir Singh. (2010) 12 SCC 112: (2010) 4 SCC (Civ) 585, cited The present case is a classic case, where the plaintiffs by clever drafting of the plaint, attempted to make out an illusory cause of action, and bring the suit within the period of limitation. The plaintiff's deliberately did not mention the date of the registered sale deed dated 2-7-2009 executed by them in favour of Respondent 1, since it would be evident that the suit was barred by limitation. The prayer however mentions the date of the subsequent sale deed i.e. 1-4-2013 when the suit property 45 was further sold by Respondent 1 to Respondents 2 and 3. The omission of the date of execution of the sale deed on 2-7-2009 in the prayer clause, was done deliberately and knowingly, so as to mislead the court on the issue of limitation."
37. As per the provisions of Sections 201 and 202 of the Indian Contract Act, 1872, the termination of agency must be in accordance with Sections 201 and 202 of Indian Contract Act, 1872 and the same is read as under:
"201. Termination of agency.--An agency is terminated by the principal revoking his authority, or by the agent renouncing the business of the agency; or by the business of the agency being completed; or by either the principal or agent dying or becoming of unsound mind; or by the principal being adjudicated an insolvent under the provisions of any Act for the time being in force for the relief of insolvent debtors. --An agency is terminated by the principal revoking his authority, or by the agent renouncing the 46 business of the agency; or by the business of the agency being completed; or by either the principal or agent dying or becoming of unsound mind; or by the principal being adjudicated an insolvent under the provisions of any Act for the time being in force for the relief of insolvent debtors.
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. --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. (a) A gives authority to B to 47 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.
(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. (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."
38. Section 202 of the Indian Contract Act categorically define that 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 terminate to the prejudice of such interest. Even in this case, the plaintiff executed 48 agreement of sale and GPA in favour of the defendant Nos.1 and 2 in the year 1992 and the same was acted upon by defendant Nos.1 and 2 in the year 2002. Therefore, the agency gets terminated by the business of the agency being completed and even otherwise the GPA cannot be cancelled by the plaintiff without any express contract between them. Therefore, the contention of the appellants' counsel cannot be acceptable that suit is maintainable and cause of action arose for filing the suit and the suit is not barred by law is not acceptable one.
39. On the other hand, a clever drafting of the plaintiff cannot be a ground to say that the suit is not barred by limitation and there is no cause of action for the appellants to file the suit in the trial Court after 25 years of executing the GPA. Therefore, the trial Court considering all these aspects, though not referred in respect of Order VII Rule 11(d) regarding limitation point and cause of action that arose on the point of cause of action, but on perusal of the entire pleadings of the plaint and the 49 plaintiff document, it is clear that the suit is barred by limitation. The suit is not maintainable for non issuing the statutory notice under Section 125 of the Societies Act and no cause of action arose for the plaintiff for filing the suit. Accordingly, the order of the trial Court does not call for interference.
40. In view of the above findings, the appeal filed by the appellants is liable to be dismissed.
41. Accordingly, the appeal is hereby dismissed.
Sd/-
JUDGE CS/GBB