Andhra Pradesh High Court - Amravati
M/S. Tatipaka Primary Agriculture ... vs The State Of Andhra Pradesh, on 18 February, 2025
APHC010072472024
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3330]
(Special Original Jurisdiction)
TUESDAY, THE EIGHTEENTH DAY OF FEBRUARY
TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE SRI JUSTICE TARLADA RAJASEKHAR RAO
WRIT PETITION Nos:
N 4029 AND 3570 OF 2024
BETWEEN:
M/s. Tatipaka Primary Agriculture Co-operative
Co Credit Society ...Petitioner
Limited
AND
The State Of Andhra Pradesh and Others ...Respondent(s)
Counsel for the Petitioner:
1. SRINIVAS BASAVA
Counsel for the Respondent(S):
1. GP FOR COOPERATION (AP)
2. RAMBABU KOPPINEEDI
The Court made the following:
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COMMON ORDER:
The Writ Petition No.4029 of 2024 is filed under Article 226 of Constitution of India for the following relief/s:
......for issuance of an appropriate Writ, Order, or direction more particularly one in the nature of Writ of Certiorari, calling for the records in O.A. No.53 of 2019 vide orders dated 24.11.2023 on the file of the A.P. Co-operative Tribunal, Vijayawada and set-aside the same as illegal, arbitrary and contrary to the principles of natural justice, violative of Fundamental Rights guaranteed under Article 14 and 21 of the Constitution of India and contrary to the provisions of the Andhra Pradesh Cooperative Societies Act, 1964 and rules made therein and consequently set-aside the same as void and illegal and pass such other order or orders.....
2. The Writ Petition No.3570 of 2024 is filed under Article 226 of Constitution of India for the following relief/s:
....for issuance of an appropriate Writ, Order, or direction more particularly one in the nature of Writ of Certiorari, calling for the records in O.A. No.20 of 2018 vide orders dated 24.11.2023 on the file of the A.P. Co-operative Tribunal, Vijayawada and set-aside the same as illegal, arbitrary and contrary to the principles of natural justice, violative of Fundamental Rights guaranteed under Article 14 and 21 of the Constitution of India and contrary to the 3 provisions of the Andhra Pradesh Cooperative Societies Act, 1964 and Rules made therein and consequently set- aside the same as void and illegal and pass such other order or orders.....
3. Unnecessary facts are shorn off in the case. The 2nd respondent by name Sri Lakkisetti Suranna, who is elected and discharged duties as President of the Petitioner-Society i.e. M/s. Tatipaka Primary Agriculture Cooperative Credit Society Limited No.3746 (hereinafter called as 'Society'), for a period from 01.07.1987 to 30.06.1990. During the tenure of his presidentship of the Society, he had gifted an extent of land Ac.0.08 cents in R.S. No.87/2 of Tatipaka Village, Razole Mandal, East Godavari District, on a condition to name the building, of his late father Sri Lakkisetti Subba Rao. The said registered gift was executed on 02.01.1989 in favour of the Society. Later he executed a codicil deed on 04.01.1989 for wrongly mentioning of boundaries in the gift deed.
4. The 2nd respondent herein served as Vice-President from 04.02.2013 to 03.02.2018 and he was appointed as acting President of the Society from 04.09.2014 to 28.09.2015. However, the Society has not constructed the building in the land donated by the 2nd respondent herein, as it is not suitable for the construction of the building. Since, then, the 2nd respondent herein is insisting to give back the land gifted by him through registered gift deed dated 02.01.1989. When, the Society is not agreed for the same, the 2nd respondent herein filed W.P. No.13445 4 of 2000 in the common High Court at Hyderabad and the said Writ Petition was dismissed vide order dated 27.03.2003. The Court pleased to observe as follows:
"That the petitioner is not precluded from approaching the competent civil court, if so advised."
The said order is filed as Exhibit P-3 in the Writ Petition.
5. After dismissal of the Writ Petition, during the tenure as President by the 2nd respondent for the 2nd term, he himself executed a registered revocation deed dated 21.09.2015 on behalf of the Society and he also signed on behalf of the Society in the capacity of Chief Executive Officer. The said fact of revocation of the gift deed came to the knowledge of the auditor of the Society and he submitted a report to the higher officials. The said report is filed as Exhibit P-7 in the Writ Petition. Then, the Joint Registrar of Cooperative Societies/ District Cooperative Officer, East Godavari District, Kakinada, vide proceedings in Rc.No.3774/2016-A, dated 17.01.2017, ordered an inspection under Section 52 of the Andhra Pradesh Cooperative Societies Act (hereinafter called the Act) into the affairs of the Society. On receiving of the report under Section 52 of the Act, the District Cooperative Officer vide proceedings in Rc.No.3774/2016, dated 16.12.2017, has ordered Surcharge proceedings under Section 60 of the Act.
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6. The 3rd respondent who is appointed as Surcharge Officer, after following procedure as contemplated under the Act, vide proceedings Rc.No.1880/2016-B, dated 13.08.2019, ordered to recover Rs.18,00,000/- with interest of 15% per annum from 01.03.2017 till the date of realization of the Surcharge amount. Basing upon the findings, criminal charges also initiated against the 2nd respondent herein and the same was registered as F.I.R. No.230/2019, dated 14.12.2019.
7. Assailing the surcharge proceedings dated 13.08.2019, the 2 nd respondent herein filed OA No.53 of 2019 on the file of the Andhra Pradesh Cooperative Tribunal, Vijayawada and also assailed attachment order dated 05.03.2018, attaching property of the 2 nd respondent herein, in O.A. No.20 of 2018 before the Cooperative Tribunal, Vijayawada. The said two O.A.s were allowed by the Cooperative Tribunal and the same were assailed before this Court by virtue of above two Writ Petitions respectively. The Tribunal after considering the evidence, material placed before the Court, has set aside the Surcharge Proceedings dated 13.08.2019, vide order dated 24.11.2023, on the ground that cancellation of gift deed by the 2nd respondent and re-registration of gift deed does not amount to misappropriation, fraudulent retention, breach of trust or willful negligence. As such the Surcharge Proceedings initiated under Section 60 of the Act, based on the findings of inspection report is 6 untenable with further observations, the Surcharge Proceedings does not fall under any of the grounds mentioned in Section 60 of the Act.
8. The tribunal has set aside surcharge proceedings assailed in O.A. No 53 of 2019 and also set aside attachment order in O.A. No.20 of 2018 in the aforesaid two Writ Petitions respectively on the ground that the Tribunal erred in allowing the OAs and it does not fall under Section 60 of the Act where the act of the 2 nd respondent clearly amounts to misappropriation and fulfills the other two conditions enumerated in Section 60 of the Act. And the 2nd respondent ought to have been filed suit for cancellation of registered gift deed and he cannot revoke execution of registered gift deed on behalf of the Society and additionally, it is stated in accordance with 29 (i) and (f) of the registered bylaws of the Society, in order to execution of any document or deed both the President and Executive Officer must sign or endorse it. While, in the present case, the President himself has executed the revocation deed without counter signature of the Executive Officer and he is not permitted to do so on behalf of the Society. Hence, the said execution itself is in violation of bylaws and the 2nd respondent cannot cancel the gift deed executed by him and he ought to have filed appropriate proceedings before the competent Civil Court for cancellation of registered gift deed dated 02.01.1989. And it is also stated that the 2nd respondent herein filed W.P. No.13445 of 2000, for cancellation of the 7 gift deed and the same was dismissed directing the petitioner therein to approach competent Civil Court. Despite, the said order, he himself executed revocation deed that it clearly manifests that the gift deed was cancelled in order to misappropriation, elaborated further under Section 126 of the Transfer of the Property Act and the revocation of the gift deed by mere will of the donor, is void either in whole or in part, as the case may be. In such case, it cannot be done without issuing any notice to the donee, wherein the present case, the 2nd respondent has executed the revocation deed without notice to the Society and the said cancellation is unilateral which violates section 26(k)(i) of the Registration Act. Hence, prayed to set aside the impugned order in O.A. No.53 of 2019 and O.A. No.20 of 2018, on the file of the Andhra Pradesh Cooperative Tribunal, Vijayawada.
9. The 2nd respondent has filed a counter-affidavit refuting all of the Society's allegations, claiming that the property was given to the Society for a specific purpose and that, although the Society has acknowledged that it has not built a building on the land that the 2nd respondent donated, the 2nd respondent has revoked the gift deed he had signed. Since the Society hasn't built the building, the 2nd respondent has revoked the gift deed, he had signed, and even though a registered gift deed was signed with the understanding that a building would be built, the condition was not met. As a result, the 2nd respondent has correctly 8 revoked the registered gift deed and argued that the Society did not receive possession, which is supported by the caveat the Society submitted to the trial Court. In the affidavit filed in support of the caveat under Section 148A of CPC, it is asserted that As the gift deed is a conditional one, the title and possession are not delivered to the petitioner, so the said gift deed is not duly executed, attested and accepted. As the gift deed is conditional, it is void under law. Therefore, the 2nd respondent has rightly cancelled the registered gift deed. Surcharge proceedings were initiated against the 2 nd respondent, without taking into account the above said fact.
10. As the gift deed was not duly executed, attested, and accepted and the gift deed is conditional gift, hence it is void under law and also stated that under Section 30 of the Act, the ultimate authority is vested with the Society and also further contended that under Section 31 of the Specific Relief Act, cancellation can be ordered and the Society has to file suit for cancellation of the revocation deed executed by the 2nd respondent herein and the Tribunal has rightly passed order and the cancellation of revocation by the 2nd respondent herein does not fall under the condition enumerated under Clause 1 of Section 60 of the Act.
11. It is vehemently argued that the Society is not entitled for any relief and also contended that Writ of Certiorari is not remedy for mere wrong decision and for a decision with fundamentally errors that are 9 blaring and evident on the face of the proceedings. Hence prayed to dismiss the Writ Petition.
12. Heard Sri Srinivasa Basava, learned counsel for the petitioner and Sri K. Chidambaram, learned senior counsel on behalf of Sri Rambabu Koppineedi, learned counsel appearing for Respondent No.2.
13. On the aforesaid contentions raised by the respective counsels for petitioner and respondents, and after giving thoughtful consideration, the Court make following issues for consideration:
1) Whether the order of the A.P. Co-operative Tribunal, Vijayawada, in O.A. No.53 of 2019 and O.A. No.20 of 2018, is sustainable under law and whether the 2nd respondent can unilaterally cancel the registered gift deed in view of Section 26 K(i) of Registration Act.
2) Whether the 2nd respondent can revoke /cancel the registered gift deed contrary to By-law No.29 ?
3) Assertion made in the affidavit filed in support of Caveat under Section 148A of CPC is binding on the Society?
4) What is the purport of Section 31 of the Specific Relief Act ?
5) Under Section 30 of the A.P Co-operative Societies Act, is the 2nd respondent alone can be treated as a general body in the absence of other members of the Society?
6) Whether the cancellation/ revocation of the registered gift deed unilaterally, does amount guilty/ or breach of trust in relation to the Society?10
14) Issue No -1:
Rule 26 1 (k)(i) challenged before composite High Court of Andhra Pradesh, in Kaitha Narasimha v. The State Government of Andhra Pradesh, represented by its Principal Secretary, in WP No.3744 of 2007, wherein it is held that that amendment to Section 26(k) is ultra vires of the provisions of the Registration Act, 1908.
15) The Hon'ble Apex Court in Thota Ganga Laxmi and another v.
Government of Andhra Pradesh1 held that unilateral cancellation of sale deed is impermissible that the cancellation as well as the registration of the sale deed void and non est and can be ignored altogether.
16) Under Section 126 of the Transfer of Property Act, the Gift Deed may be suspended or revoked only in the condition enumerated in the Section. The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked, but a gift which the parties agree shall be revocable wholly or in part; at the mere will of the donor, is void wholly or in part, as the case may be. A gift may also be revoked in any of the cases (save want or failure of consideration), in which, if it were a contract, it might be rescinded. Save as aforesaid, a gift cannot be revoked.
1 2010(15)SCC 207 11
17) Nothing contained in this section shall be deemed to affect the rights of transferees for consideration without notice.
18) In Kolla Rajesh Chowdary v. State of Andhra Pradesh, a learned Single Judge of the High Court held that Rule 26 (k) (i) is equally applicable to the gift deed.
19) Learned senior counsel K. Chidambaram for the 2nd respondent would submit that the property was not delivered to the Society. Hence, the aforesaid discussion would not applicable and binding on the 2 nd respondent, as the property has not been delivered. Therefore, the 2 nd respondent is at liberty to execute the cancellation deed. And also contended that the purpose for which the gift was executed was not fulfilled by the Society, as such the 2nd respondent is at liberty to cancel or revoke gift deed executed by him in favour of the Society.
20) In this regard, learned counsel appearing for the petitioner rely on the judgment of the Hon'ble Apex Court in Hamdamal v. Avadiappa Pather and others2 held that on the delivery of the deed to the donee there was an acceptance of the transfer within Section 122 of the Transfer of Property Act, 1882, and thereupon the gift became final, subject to its registration as required by Section 123 of the Act. 2 1991(1)SCC 715 12
21) Once the execution of deed in favour of the Society, irrespective to the delivery of the possession that the same possession is deemed to be delivered to the donee. As there is no such default clause in the Registered Gift Deed that if the condition is not fulfilled and the same will be returned back to the donor. Hence, the contention raised by the 2 nd respondent is not valid contention in view of the judgment of the Apex Court. The finding of the Tribunal is unsustainable and contrary to law.
22) In view of the above said decision, the issue is held in favour of the petitioner and against the 2 nd respondent (Donor).
23) Issue No -2 The Society has framed bye-laws and the same was registered and it is undisputed. Under Clause (i) and (f) of the bye-law No.29, the Society is having power to sue or to be sued and to face all the legal consequences. In order execute any document or deed on behalf of the Society, both the president and Executive Officer must sign or endorse it.
24) As seen from the bye-law, both the President and the Executive Officer have to sign to execute any document or deed on behalf of the Society. In the particular case, the 2nd respondent himself has executed on behalf of the Society in favour of the 2nd respondent herein. Therefore, very execution of the cancellation/ revocation of the gift deed executed by the 2nd respondent, is contrary to the bye-laws and the said 13 execution is not binding upon the Society and it is liable to be ignored, void in view of the bye-laws framed by the Society.
25) Issue No - 3 The Apex Court in Smt. Savitramma v. Cecil Naronha and another3 referring the judgment of the Apex Court in the case the State of Bombay v. Purushotham Joc Naik4, held that no reliance on the face of the affidavit that affidavit itself is not a proof, fact of a conclusive evidence unless it is proved.
26) The affidavit only states that the gift deed is conditional; the petitioner does not receive the title or possession, so the gift deed is not properly executed, attested, and accepted. This is not conclusive evidence; rather, it must be demonstrated in accordance with the law and as decided by Apex Court in the case of R. Viswanathan Vs. Rukn- Ul-Mulk Syed Wajid5, that when the Court has not ordered the proof of a fact by an affidavit it is no evidence nor an affidavit can be used as evidence under the Evidence Act.
27) And the Apex Court has held that in the Judgment of Hamdamal (supra 2) on delivery of the Deed to the donee, there was an acceptance of the transfer within Section 122 of the Transfer of Property Act. 3 AIR 1988 SC 1987 4 AIR 1952 SC 317 5 AIR 1963 SC 1 14
28) In view of the above said decision, the issue is held in favour of the petitioner and against the 2 nd respondent.
29) Issue No - 4 The learned designate senior counsel has canvassed the argument relying on Section 31 of Specific Relief Act that the society had to file the suit if at all, is aggrieved not by 2nd respondent. For the benefit the provision is extracted hereunder:
When cancellation may be ordered:
(1) Any person against whom a written instrument is void or void able, and who has reasonable apprehension that such instrument, if left out standing, may cause him serious injury, may sue to have it adjudged void or void able, and the Court may, in its discretion, so adjudge it and order it to be delivered up and cancelled.
(2) If the instrument has been registered under the Indian Registration Act, 1908 (16 of 1908), the Court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation.
30) From the reading of the aforesaid provision, under sub-section (1) of Section 31 of Specific Relief Act, it is manifest that three conditions are requisite for the exercise of jurisdiction to cancel an instrument i.e., (1) An instrument is avoidable against the Plaintiff; (2)The Plaintiff may reasonably apprehend serious injury by the instrument being left or 15 outstanding; and (3)In the circumstances of the case, the Court considers it proper to grant this relief of preventive justice.
31) On careful examination of the provision it manifests or suggests that a party against whom a claim under a document might be made is not bound to wait till the document is used against him, had to file suit. It is the case of the 2nd respondent, the Society has not met the requirement of the gift being executed. As per the contention, the registered gift deed executed by the 2nd respondent is void or voidable if it is not assailed it may cause injury to the 2nd respondent invariably he had to file the suit for revocation of gift deed.
32) A Full Bench of the Madras High Court in the case of Muppudathi Pillai v. Krishnaswami Pillai6 elaborately discussed the provision of section 31 (old Section 39) of Specific Relief Act and held:
The principle is that such document though not necessary to be set aside may, if left outstanding, be a source of potential mischief. The jurisdiction under Section 39 is, therefore, a protective or a preventive one. It is not confined to a case of fraud, mistake, undue influence, etc. and as it has been stated it was to prevent a document to remain as a menace and danger to the party against whom under different circumstances it might have operated. A party against whom a claim 6 MANU/TN/0455/1959 : AIR 1960 Mad 1 16 under a document might be made is not bound to wait till the document is used against him. If that were so he might be in a disadvantageous position if the impugned document is sought to be used after the evidence attending its execution has disappeared. Section 39 embodies the principle by which he is allowed to anticipate the danger and institute a suit to cancel the document and to deliver it up to him. The principle of the relief is the same as quia timet actions, which means sleeping on one's rights, especially when it becomes clear that those rights are about to be violated. On careful examination of the provision, the 2nd respondent has to initiate action as he is claiming that the document i.e. gift deed is void as the condition was not met with.
33) The issue is accordingly answered in favour of the society against the 2nd respondent.
34) Issue No - 5 Under sub-section (1) (a) off section 30 of Andhra Pradesh Co-
Operative Societies Act, 1964 ultimate authority of society is vests with General Body
35) The President alone cannot be considered as a general body. Members of the Society who are entitled to vote in the affairs of the Society constitute general body. The 2nd respondent, who was the President at the relevant point in time, cancelled the registered gift deed 17 executed by him alone, which does not fall under the category of general body.
36) The issue is accordingly answered in favour of the Society against the 2nd respondent.
37) Issue No - 6 "Trust" would, inter alia, mean using or disposing of the property by a person who is entrusted with or has otherwise domination the reover. Such an act must not only be done dishonestly but also in violation of any direction of law or any contract express or implied relating to carrying out the trust. The 2nd respondent being the Society's President, supposed to safeguard the Society's assets, but instead he abused his position of power by rescinding the registered gift he had signed and the document by executing a revocation contravening all the laws and bylaw of the society which is illegal and amounts to a breach of trust. The conclusion arrived by the tribunal that the 2nd respondent act does not meet the conditions enumerated in section 60 the co-operative societies act is ludicrous or absurd.
Conclusion:
38) Since the act of the 2nd respondent was unlawful, the revocation deed executed on 21.09.2015 is against the law as discussed above. In view of the findings or conclusions arrived by this Court in addressing all 18 of the arguments made by the learned senior counsel for the 2nd respondent, the prayer in the Writ Petition No 4029 of 2024 is granted and consequently the WP No 3570 of 2024 stands allowed and both the orders in O.A. No. 53 of 2019 and O.A. No: 20 of 2018 are hereby set aside. The registered revocation gift deed executed on 21.09.2015 is hereby revoked or cancelled. And if the property that gifted to the Society by the 2nd respondent is not available then the order of the surcharge officer is sustained to recover the amount.
As a sequel, interlocutory applications, if any pending in this Writ Petition shall stand closed. No order as to costs.
___________________________________ JUSTICE TARLADA RAJASEKHAR RAO Date: 18.02.2025 Harin 19 THE HON'BLE SRI JUSTICE TARLADA RAJASEKHARA RAO 72 W.P.Nos. 4029 and 3570 OF 2024 Date: 18.02.2025 Harin