Andhra HC (Pre-Telangana)
M.Sreedhar vs The A.P. Co-Operative Tribunal, ... on 24 June, 2013
Equivalent citations: AIRONLINE 2013 AP 65, (2013) 5 ANDHLD 176
Author: M.S.Ramachandra Rao
Bench: M.S.Ramachandra Rao
THE HON'BLE SRI JUSTICE M.S.RAMACHANDRA RAO W.P.No.8304 of 2008 Dated:24-06-2013 M.Sreedhar...petitioner The A.P. Co-operative Tribunal, Hyderabad and others....RESPONDENTS Counsel for the petitioner: Sri Hemendranath Reddy Counsel for the 3rd respondent : Sri C.B.Ram Mohan Reddy Counsel for the 4th respondent : Sri J.Prabhakar <GIST: >HEAD NOTE: ? Cases referred 1 1994 (1) An.W.R. 25 2 (2007) 14 SCC 792 3 (2009) 17 SCC 27 4 AIR 1951 SC 469 5 (2001) 2 SCC 498 6 1998 (2) ALD 569 7 1997 (4) ALD 816 (DB) 8 2007 (5) ALD 339 9 (2006) 10 SCC 96 10 AIR 1985 AP 2000 11CDJ 2008 APHC 345 12 2010 (6) ALT 142 13 2013 (3) ALT 171 14 (2005) 6 SCC 304 15 (1995) 3 SCC 693 162012 (1) ALD 118 17 (1999) 8 SCC 16 18 (2009) 11 SCC 18 19 (2005) 6 SCC 304 20 (1995) 3 SCC 693 21 2013 (3) ALD 171 22 AIR 1995 S.C. 448 23 AIR 1990 S.C. 619 24 (2009) 6 SCC 194 para 32 25 AIR 1966 SC 605 para 13 p.612 26 (2004) 1 S.C.C. 287 27 1997 (4) ALD 816 (DB) 28 AIR 1985 A.P. 200 30 1984 AC 74 31 AIR 1968 SC 956 32 1998 (2) ALD 569 33 (2007) 15 SCC 174 34 (2005) 3 S.C.C. 241 35 (2012) 5 S.C.C. 443 36 (2008) 8 S.C.C. 497 37 (2006) 1 SCC 106 Para.17, Pg.116 38 (2002) 9 SCC 375 Para.3, 39 (1981) 4 SCC 246 W.P.No.8304 of 2008 ORDER :
In this writ petition, the petitioner challenges the order dt.04.03.2008 of the 1st respondent in C.T.A.No.5 of 2004 confirming the order dt.15.09.2003 in ARC.No.3 of 2002 of the 2nd respondent and seeks their quashing by issuance of a Writ of Certiorari.
2. The petitioner is the purchaser of plot No.59 admeasuring 493.3 sq.m situated in Sy.No.52, 138, 139 and part of Sy.No.137, Yousufguda, Hyderabad, and forming part of layout plan approved by the Municipal Corporation of Hyderabad in proceedings No:Open/201/1966 at the instance of the 4th respondent Society (for short, 'Society') under a registered sale deed dt.28.01.1988 executed by it in his favour through respondent no. 5 and 6. The petitioner obtained permission for construction from the Municipal Corporation of Hyderabad on 29.03.1989 and constructed a house in the said plot in 1989 and is in possession and enjoyment of the same.
3. The Society issued a notice dt.24.11.2000 to the petitioner proposing to cancel the sale deed executed by it in his favour. The petitioner filed O.S.No.6951 of 2000 before II Junior Civil Judge, City Civil Court, Hyderabad to declare the said notice dt.24.11.2000 as illegal and beyond its competence and sought a perpetual injunction restraining the Society from cancelling the sale deed. On 30.07.2003, the said suit was decreed ex parte. I.A.No.1012 of 2005 was filed by the Society to set aside the ex parte decree. On 07.04.2006, the said I.A. was dismissed. C.R.P.No.3894 of 2006 was filed by the Society in this Court challenging the same. On 11.06.2009, the said CRP was allowed and consequently the suit was restored to the file of the trial court. Ultimately on 03.11.2009, the suit was dismissed.
4. In the year 2000, one V.G.K. Prasad, husband of 3rd respondent initiated proceedings ARC.No. 38 of 2000 under Section 61 of the A.P. Co-operative Societies Act, 1964 (for short, 'the Act') before the Divisional Co-operative Officer, Charminar, Hyderabad against petitioner and respondent Nos.4 to 6 herein to declare the transfer/allotment and registration of Plot No.59 in favour of petitioner is illegal and to direct the Society to re-allot it in his favour. He alleged that 3rd respondent is his wife and she was a member of the Society; that she transferred her membership to him in the year 2000; that earlier certain plots were allotted to her but they were found to be occupied by unsocial elements; so 3rd respondent requested the Society to allot alternative plot; that several illegalities were committed by respondent Nos.5 and 6 while they were acting as President and Secretary of the Society; petitioner was admitted on 27.1.1988 as a member of the Society by Respondent Nos.5 and 6 even though he was a minor, aged 13 years on that day, contrary to the bye-law no.4 of it's registered bye-laws; plot No.59 had been allotted to 8th respondent by the Society and sale deeds dt.20.05.1975 and 01.05.1984 were executed in his favour; 8th respondent later surrendered it to the Society; petitioner paid membership fee on 27.01.1988 and got himself admitted against membership No.1222 and on the next day the respondent Nos.5 and 6 (ex-President and ex-Secretary of Society) purporting to act as if they were it's current office bearers executed a registered sale deed dt.29.03.1988 in petitioner's favour; when 8th respondent got the property under the sale deeds dt.20.05.1975 and 01.05.1984 from the Society , without cancelling the said sale deeds, it could not have executed any sale deed through respondent Nos. 5 and 6 in favour of petitioner ; and therefore, the transfer/allotment and registration of plot No.59 by the Society to petitioner is illegal and unsustainable and the Society should be directed to re-allot the same to him.
5. By award dt.25.04.2002, ARC No.38 of 2000 was dismissed by the said authority/arbitrator. He held :
(i) the transfer of membership by 3rd respondent to her husband V.G.K. Prasad is invalid;
(ii) the claim by V.G.K. Prasad is barred by limitation as he had approached the arbitrator under Section 61 of the Act 20 years after the 3rd respondent vide letter dt.15.01.1980 requested the Society to allot alternate plot to her;
that plot No.59 was first allotted to 8th respondent and registered in his favour by sale deeds dt.20.05.1975 and 01.05.1984; 8th respondent surrendered the plot to the Society and thereafter it was registered to the petitioner under registered sale deed dt.28.01.1988; that 8th respondent has made no claim after surrendering plot No.59 to the Society; and more than 12 years later, V.G.K. Prasad has raised the dispute under Section 61, which is impermissible;
(iii) that the sale of plot No.59 to the petitioner is not invalid on the ground that he was a minor on the date of the sale and as per the amendment made to the Act in 2001, minors are eligible to become members; the petitioner is the rightful owner of plot No.59; and
(iv) the 3rd respondent attended the General Body Meetings of the Society held on 22.07.1979, 17.12.1989 and 10.06.1990 and never raised the question of allotment of alternate plot in lieu of plot No.226 allotted to her being occupied by unsocial elements; and it is not open for V.G.K. Prasad to state that he is unaware of allotment of plot No.59 to petitioner.
6. Thereafter, the 3rd respondent filed ARC No.3 of 2002 before 2nd respondent under Section 61 of the Act to (i) declare all illegal and unlawful allotments and registrations to non-members as void, illegal and invalid and contrary to the Act and the Rules and bye-laws of the Society; and (ii) to direct the Society to cancel all such illegal, unlawful, invalid allotments and registrations as recommended by the enquiry officer (who had conducted enquiry under Section 51 of the Act) and re-allot one such plot to her as she was a senior-most member who paid advance for the plot and total cost before 15.10.1964 and was denied and deprived of allotment of plot; and (iii) to direct the Society to allot and register plot No.198 which is not registered so far in view of the promise and commitment given to her by the Society through their notice dt.29.09.1964. It is the contention of the 3rd respondent that she had also mentioned about plot No.59 in the prayer made in the ARC before the figures "198", that therefore she claimed in the ARC allotment of plot No.59 or plot No.198. The counsel for the petitioner refuted this strenuously and alleged that there is no mention of plot No.59 at all in the prayer before the arbitrator in the ARC and the words "59 or" were subsequently interpolated by 3rd respondent in collusion with the arbitrator. This aspect will be discussed below.
7. In her pleadings in the ARC, 3rd respondent stated that she had been a member of the Society and had paid membership fee and cost of plot (to be allotted by the Society) prior to 15.10.1964; the Society purchased Ac.32.19 gts. in the above Sy.nos. at Yousufguda; the Society promised to allot a plot to her and she requested for allotment of plot of extent 750 Sq.yds.; the Managing Committee of Society fraudulently inducted 288 new members in 1979 to 1999 without resolution of the General Body cheating the original members; twice plots were allotted to her by the Society but they were found to be occupied by unsocial elements and the Society could not give physical possession of the said plots; certain non-members were also allotted plots by the Society; only in the General Body Meeting held on 24.12.2000, she came to know about the fraud and illegal activities of respondent Nos.5 and 6 in allotting plots to persons junior to her and to non-members such as the petitioner in violation of bye-laws of the Society; details of the dealings of respondent Nos.5 and 6 in relation to several plots including plot No.59 were given in the ARC.
8. The petitioner, who was arrayed as 6th respondent in the ARC, filed a counter in the ARC opposing the grant of any relief to 3rd respondent. He contended that 3rd respondent deliberately suppressed the fact of dismissal on 25.04.2002 of ARC.No.38 of 2000 filed by her husband V.G.K. Prasad; the reliefs sought in this ARC and in ARC.No.38 of 2000 are identical; ARC.No.38 of 2000 was dismissed on the ground that it is barred by limitation; it was held in the said ARC that (i) the 3rd respondent's husband was not entitled to raise a dispute u/Section 61 based on findings in the enquiry report under Section 51 of the Act and (ii) petitioner was the rightful owner of plot No.59; ARC No.3/2002 is barred by principle of res judicata as findings in ARC No.38/2000 are binding on 3rd respondent; plot No.59 was conveyed to petitioner under registered sale deed dt.28.01.1988 and he obtained permission from M.C.H. on 29.03.1989 for construction of a house and completed the same in 1989; in the year 2000 and after passage of 12 years, with ulterior motive, the 3rd respondent has raised this time-barred claim; bye-laws of Society and executive instructions have no statutory force and cannot be pressed into service to declare a transaction which took place 15 years previously as illegal; and therefore, the ARC.No.3/2002 should be dismissed.
9. The respondent Nos.4, 6 and 7 herein who were arrayed as respondent Nos.1, 3 and 4 in ARC.No.3 of 2002 filed a common counter on 07.12.2002 before 2nd respondent contending that 6th respondent herein did not know the reasons why 3rd respondent kept silent for all these years without raising any claim; that membership of 3rd respondent was transferred by her to her husband V.G.K. Prasad; the earlier ARC. No.38 of 2000 filed by her husband was dismissed and ARC.No.3/2002 filed by 3rd respondent is not maintainable.
10. The 8th respondent filed counter in the ARC stating that it is not maintainable as against him; after allotment of plot No.59 in his favour and execution of sale deeds by Society in 1975 and 1984, he relinquished his rights over the said property and voluntarily surrendered it to the Society; that he is neither owner of the property in question nor has he been in possession and that he does not have any right, title or interest therein; the 3rd respondent has no locus standi to file the ARC by suppressing the fact of dismissal of ARC.No.38 of 2000 by her husband V.G.K. Prasad.
11. By award dt.15.09.2003, the 2nd respondent held that the proceeding ARC.No.3 of 2002 filed by 3rd respondent is not barred by doctrine of res judicata; that the alienation of plot No.59 by the Society to the petitioner is the result of fraud and collusion between petitioner and respondent Nos.5 and 6 ; it is a sham transaction and the sale deed dt.28.01.1988 executed in petitioner's favour is void ab initio; the proceeding is also not barred by limitation as the same was filed within three years from the date of knowledge as per Article 58 of the Limitation Act, 1963; that the 3rd respondent came to know about the irregular and fraudulent allotment of the plot only on 24.12.2000 in the General Body meeting of the Society held on that day; ignoring the rightful, lawful and superior claims of 3rd respondent who was admitted as a member in 1964, plot No.59 was registered by respondent Nos.5 and 6 acting ostensibly as office bearers of the Society on 28.01.1988 in favour of petitioner even though he was not admitted as a member by the competent authority i.e., the General body; the term of respondent Nos.5 and 6 who were President and Secretary of the Society had expired on 10.06.1987 and as on 28.01.1988, they did not hold the said offices and had no authority to execute the sale deed in favour of the petitioner on that day or to inducted him as a member on 27.1.1988; the sale in favour of the petitioner is not supported by adequate consideration and did not convey or confer any right over the said plot as per Section 54 of the Transfer of Property Act, 1882; as per Section 7 (3) of the said Act, transfer by a person not authorized to dispose of transferable property not his own is ab initio void in law and is incapable of ratification subsequently; and therefore, he directed the Society to initiate action for resumption of plot No.59 and after resumption, allot and register the said plot in favour of 3rd respondent.
12. Aggrieved thereby, petitioner filed C.T.A.No.5 of 2004 before 1st respondent.
13. By order dt.04.03.2008, 1st respondent dismissed the appeal confirming the order dt.15.9.2003 passed by 2nd respondent in ARC.No.3 of 2002. In the said order, the 1st respondent held that the 3rd respondent made a representation on 15.01.1980 to the Society complaining that more than 120 members who were junior to her were provided plots and she was denied a plot from 1974 to 1990; on 15.02.1987, a resolution was passed by the General Body not to supply any information about allotment of plots in respect of newly added members; the 8th respondent was allotted plot No.59 and sale deed dt.01.05.1984 was executed in his favour; he surrendered it to the Society as he could not get Urban Land Ceiling clearance; but the Society has not taken any steps for cancellation of the registered sale deed executed in favour of 8th respondent in respect of plot No.59; the term of the Managing Committee in which respondent Nos.5 and 6 were President and Secretary expired on 11.10.1987; vide proceedings No.48/87F dt.29.12.1987, the District Collector/Election Authority, Hyderabad, appointed a Co-operative Sub-Registrar (Housing) as Election Officer to conduct elections to the Managing Committee of the Society fixing 25.01.1988 as the date for filing nominations, 26.01.1988 - for scrutiny of nominations and publication of valid list of nominations, 27.01.1988 - for withdrawal of nominations and publication of final list and 10.02.1988 as the polling date; that the newly elected body assumed office on 10.02.1988; from 11.10.1987 till 10.02.1988, there was neither elected Managing Committee nor a Person-In-Charge committee; when the election process was going on, the petitioner who was a minor, aged 13 years then, was admitted as a member on 27.01.1988, and sale deed was executed in respect of plot No.59 in his favour on 28.01.1988; that petitioner failed to establish that the sale deed executed in his favour on 28.01.1988 by respondent Nos.5 and 6 is valid and binding on the members of the Society including 3rd respondent; there is no mention of surrender of plot No.59 by 8th respondent in the sale deed dated 28.01.1988 executed in favour of the petitioner and the document reads as if it is a fresh allotment made in his favour as per resolution of the Managing Committee of the Society; such a recital is false as there was no Managing Committee of the Society at that time; there is also no mention about the earlier sale deed dt.01.05.1984 executed in favour of 8th respondent; as long as the sale deed executed by the Society on 01.05.1984 in favour of 8th respondent transferring plot No.59 in his favour is not cancelled and is in existence, there could not have been a transfer in favour of petitioner by the Society or by respondent Nos.5 and 6 in favour of the petitioner; the decision of the earlier arbitrator in ARC.No.38 of 2000 does not operate as res judicata as against the 3rd respondent; the signs of fraud or collusion are apparent on the face of record; therefore, the sale deed executed by respondent Nos.5 and 6 acting on behalf of Society in favour of petitioner on 28.01.1988 is not binding on it; the claim of 3rd respondent is also not barred by limitation as the Person-In-Charge Committee appointed by the Government on 03.08.2000 came to know only in the last week of November, 2000 that there was a sale deed in favour of petitioner in respect of Plot No.59; the arbitration case, having been filed on 06.07.2002, within six years prescribed under Rule 49(2) of the Rules framed under the Act from the date of knowledge of fraud, is not barred; the Society can ignore the sale deed dt.28.01.1988 in favour of the petitioner and take action against such illegal and fraudulent transfers; and therefore, the appeal is liable to be dismissed.
14. Aggrieved thereby, the petitioner has filed the present writ petition.
15. Heard Sri Hemendranath Reddy, counsel for the petitioner; Sri C.B.Ram Mohan Reddy for 3rd respondent; and Sri J.Prabhakar, counsel for 4th respondent.
16. The Counsel for the petitioner contended that the orders passed by respondent Nos.1 and 2 are contrary to law; the registered sale deeds dt.20.05.1975 and 01.05.1984, executed by the Society in favour of 8th respondent were not cancelled and continue to exist; the surrender allegedly made by 8th respondent in favour of the Society would not confer any right, title or interest in favour of the Society as there cannot be any transfer of title by admission and otherwise than by a registered instrument as per Section 17 of the Registration Act, 1908 r/w the Transfer of Property Act, 1882; therefore, the Society cannot claim any right, title or interest in plot No.59 enabling it to recover possession from petitioner and transfer it to 3rd respondent; even the 8th respondent's right, title or interest in the said plot is extinguished by Section 27 of the Limitation Act, 1963 as the petitioner had been in open, continuous and hostile possession of the plot No.59 from 28.01.1988 till date and has perfected his title by adverse possession. So even 8th respondent cannot take any steps at this point of time to evict the petitioner from the possession and enjoyment of the plot No.59. He contended further that the arbitrator in ARC.No.38 of 2000 dt.25.04.2002 held that it is barred by limitation and the petitioner therein cannot raise dispute based on enquiry report under Section 51 of the Act and cannot claim a particular plot, declared the petitioner herein as rightful owner of the plot and the transfer of membership in favour of the husband of the 3rd respondent is invalid; the said award was not challenged and has become final; as it was passed on merits as well as on the ground of locus standi, it binds the Society and 3rd respondent who claims through it; the 1st respondent has wrongly observed that the ARC filed by the husband of 3rd respondent was dismissed on the ground of maintainability alone, but in fact, the ARC has been dismissed on merits also and the said judgments operates as res judicata and binds the Society; that the 3rd respondent, taking advantage of the finding in the award that the transfer of membership in favour of her husband is invalid, initiated proceedings in ARC.No.3 of 2002 before 2nd respondent; 3rd respondent had specifically requested for allotment of Plot No.198 and never requested for allotment of Plot No.59 which belongs to petitioner; the 3rd respondent raised several contentions in ARC No.3/2002 and had sought for cancellation of all the sale deeds numbering about 100 in venture No.3 and some other sale deeds in other ventures; the 2nd respondent chose to confine the proceedings only to one plot, i.e., plot No.59 belonging to petitioner herein and proceeded as if 3rd respondent was disputing the correctness and validity of allotment of plot in favour of the petitioner alone; he directed the Society to initiate proceedings for resumption of plot No.59 and after resumption, allot and registered the said plot in favour of 3rd respondent; this proves his collusion with 3rd respondent; the entire order passed by the arbitrator shows that he has not considered various pleadings raised by the 3rd respondent ; the basis for initiation of proceedings and the cause of action as alleged by the respondent is an enquiry report under section 51 of the Act stated to have been submitted in the year 2000; such enquiry report submitted under section 51 will not give rise to any cause of action to an individual member to initiate proceedings and to claim the relief against the Society or against other individual members of the society; the arbitrator erroneously held that the sale deed is void and that there is no limitation period to seek it's annulment, the limitation period commenced from the date of knowledge, that the petition is not barred by limitation, that the petitioner came to know about the irregularities only on 24.12.2000 and that the period of limitation starts from that date and as such it is within limitation; the petitioner, after execution of sale deed in 1988 in his favour by Society, had obtained permission from the Municipal Corporation in 1989 and constructed house in the plot; therefore the present proceedings initiated in the year 2002 more than 13 years later are time-barred; the husband of the respondent had attended the general body meetings on 22.07.1979, 17.12.1988 and 10.06.1990 and as such the respondent cannot plead that she has got knowledge about allotment of plots on 24.12.2000 only; the arbitrator also failed to see that alleged inadequacy of consideration does not make the sale in his favor illegal and is not a ground for it's cancellation; the arbitrator did not say anything about the alleged irregularities committed by respondent Nos.5 and 6 with regard to allotment of other plots to juniors of 3rd respondent and though a specific relief was sought for cancellation of all such allotments no relief was granted; there is no bar for a minor to become a member of the Society and acquire the plot ; and therefore the orders passed by respondent no.s 1 and 2 are liable to be set aside. The counsel for the petitioner relied upon the following decisions : The Govt. Polytechnic for Women Staff Co-op. Society, Kakinada v. Kumari Kurapati Subhadramma and others1; Utha Moidu Haji v. Kuningarath Kunhabdulla and others2; Azhar Sultana v. B. Rajamani and others3; Collector of Bombay v. Municipal Corporation of the city of Bombay and others4; Balkrishan v. Satyaprakash and others5; Prapul Chandra Mukpalkar and another v. P. Ramachandra Reddy and another6; Mohd. Kareemuddin Khan (died) and others v. Syed Azam7; Kalavacherla Bala Tripura Sundaramma and others v. Rachuri Subbarayudu and others8; A. Jithendernath v. Jubilee Hills Co-operative House Building Society and another9; Mungamuru Lakshmidevamma v. Land Acquisition Officer and Revenue Divisional Officer, Kavali and other10; Smt. K.V. Sudha Ravi v. M/s. Vijayawada-Guntur-Tenali-Mangalagiri Urban Development Authority (VGTM- UDA)11; A.B.C. India Limited and others v. A.P. Industrial Infrastructure Corporation Limited, Hyderabad and another12; Bojja Subba Rao v. Government of Andhra Pradesh and others13; Makhija Construction and Engg. (P) Ltd. v. Indore Development Authority and others14; and Mahboob Sahab v. Syed Ismail and others15.
17. The counsel for the 3rd respondent, contended that the 2nd respondent became a member of the Society-Society on 21.08.1964; she paid cost of the plot and Membership fee to the Society by 14.10.1964; the Society purchased Acs.130 in Yousufguda on 03.02.1965; although the General Body of the Society enforced a ban on 27.02.1966 for admission of new members, by 1978-79 the membership had swelled to 1316 from 654 in 1964; although plot No.200 was allotted to her by the Society, possession was not given as the said plot was in occupation of unsocial elements; subsequently when another plot No.226 was allotted to her, same thing happened; that the term of the Managing Committee of the Society ended on 10.06.1987; the election notification was issued to conduct elections to the Managing Committee of the Society in December, 1987; but the petitioner was made a member of the Society on 27.01.1988 even though he was a minor at a time when there was no Managing Committee for the Society; his membership was not even confirmed by the General Body; as per bye-law no.4 of the Society, only a person who has attained the age above 18 years could have been admitted as a member and after paying the eligible membership fee, the General Body of the Society has to confirm his membership; so the sale deed in favour of the petitioner was obtained by playing fraud on the Society; on 28.01.1988, plot No.59 was registered in favour of the petitioner by respondent Nos.5 and 6 purporting to act as the then President and Secretary of the Society before the new Managing Committee assumed charge on 10.02.1988 ; the records of the registration of plot No.59 and even membership were not handed over to the new Managing Committee by respondent Nos.5 to 7; the General Body also issued circular not to give any information regarding either membership or allotment of plots to anybody; in the last week of November, 2000, the person-in-charge Committee appointed by the Government on 03.08.2000 came to know on seeing a Xerox copy of the sale deed dt.28.01.1988 about the fraudulent transfer of plot No.59 in favour of the petitioner; Sri V.G.K. Prasad, husband of the 3rd respondent thereafter filed ARC.No.38 of 2000 against the respondent Nos.4, 5 and 6 which was unfortunately dismissed on 25.04.2002; thereafter, the 3rd respondent filed ARC.No.3 of 2002 within three years from the date of the knowledge of the alleged fraud and the same was allowed on 15.09.2003 and confirmed in C.T.A.No.5 of 2004 by the 1st respondent on 04.03.2008. He further contended that the decision in ARC.No.38 of 2000 does not operate as res judicata as parties are not the same; both Tribunals found that the allotment in favour of the petitioner was bad in law; concurrent findings recorded by the respondent Nos.1 and 2 cannot be set aside in a the Writ Petition filed under Article 226 of the Constitution of India; factual issues cannot be gone into in a Writ Petition under Article 226 as the High Court is not exercising an appellate jurisdiction against the order of the 1st respondent; although initially plot No.59 was not mentioned in ARC.No.3 of 2002 by 3rd respondent, she was allowed to mention plot No.59 subsequently by the arbitrator; there are pleadings in ARC.No.3 of 2002 concerning plot No.59 in paras.22 and 23 of the application filed therein by her; the petitioner had not raised any plea of adverse possession in his counter in ARC.No.3 of 2002 and his plea in this writ petition that the claim of 3rd respondent is time-barred is vague and untenable; the Society or its members like 3rd respondent have locus to raise a dispute under Section 61 of the Act since plot No.59, which is subject matter of the ARC, was transferred by Society to 8th respondent under two registered sale deeds dt.20.05.1975 and 01.05.1984; initially on 20.05.1975, the Society had executed a registered sale deed in favour of 8th respondent in respect of plot No.59; the authorities under the Urban Land (Ceiling and Regulation) Act, 1976, determined the holding of 8th respondent and found that he was holding plot No.59 in excess of the ceiling limit prescribed under the said Act, but granted him an exemption under Section 20 of the Act enabling him to retain the plot subject to the condition that he sets up an X-ray clinic, Nursing Homes and T.B. Clinic; although he sought permission from the Government to sell the plot No.59, it was not granted; on 26.08.1982, the Society informed 8th respondent that the actual area of the plot No.59 is 664 Sq.yds., and not 475 Sq.yds mentioned in the sale deed dt.20.05.1975 and that he needs to pay a further amount of Rs.6,872.63ps. and the plot would be re-registered at his cost; the 8th respondent agreed and another registered sale deed dt.01.05.1984 mentioning the correct extent as 664 Sq.yds. was executed in his favour; in O.S.No.6951 of 2000 filed by the petitioner before the Junior Civil Judge, City Civil Court, Hyderabad against the Society, the petitioner accepted the surrender by 8th respondent in favour of the Society; the Registrar of Co-operative Societies, Andhra Pradesh, Hyderabad, issued proceedings Rc.No.16438/2000/Housing (1), dt.07.06.2000 to all Co-operative Societies including the 4th respondent Society in exercise of his powers under Section 4(2) of the Act stating that (a) transfer of plot to any member or non-member shall not be permitted by the Society except to legal heirs by inheritance, (b) that if for compelling reasons a member wants to transfer a plot, he shall surrender the same to the Society which shall pay back to the member the fee and charges collected from him along with interest from the date of possession of the plot by the members; and (c) only thereafter the Society can allot it to other eligible members; therefore the surrender by the 8th respondent in favour of the Society is valid and the transfer by the Society in favour of petitioner is invalid; the 8th respondent in his counter in the ARC.No.3 of 2002 stated that he had relinquished his rights over the property and voluntarily surrendered it to the Society and asserted that he is neither the owner nor he has any right, title or interest in the property; on 11.12.2005, the Managing Committee of the Society unanimously resolved to take all necessary steps to resume plot No.59 and to implement the order in ARC.No.3 of 2002; the sale consideration paid by 8th respondent was also returned to him; since he stated that he has surrendered plot No.59 to the Society, the Society has a right in the plot and the oral surrender is valid under the provisions of the Transfer of Property Act, 1882; since 3rd respondent is claiming the plot from the Society, she has got locus under Section 61 of the Act to raise the dispute; the jurisdiction of 2nd respondent under Section 61 of the Act is very wide; the petitioner having subjected himself to the jurisdiction of 2nd respondent in ARC.No.3 of 2002 cannot now say that the ARC was not maintainable; fraud vitiates everything and so the petitioner cannot plead equities; and therefore, the writ petition should be dismissed. He relied on T. Chittemma v. Tirumala Tirupathi Devasthanams, Tirupathi, Chittoor District16 and Maharaja Chintamani Saran Nath Sah Deo v. CIT, State of Bihar and Others17.
18. The counsel for the Society supported the contentions of counsel for 3rd respondent and contended that orders passed by respondent Nos.1 and 2 be sustained. He however conceded that once there is a transfer in favour of 8th respondent under a registered sale deed, he could not have divested himself of title by oral surrender of his title except by way of executing another registered deed in favour of the Society in view of the provisions of the Transfer of Property Act, 1882 and Section 17 of the Registration Act, 1908; in this case, there is found to be fraud and collusion of officials of the Society with petitioner; this Court should protect the interests of members of Society in view of concurrent findings of both respondent Nos.1 and 2; such findings are not liable to be disturbed in exercise of jurisdiction of this Court under Article 226 of the Constitution of India; the Society had also given complaint dt.28.01.2008 to the Hon'ble Chief Minister of Andhra Pradesh, Commissioner of Police, Hyderabad and Commissioner and Registrar of Co-operative Societies, Hyderabad in respect of the fraud committed by respondent Nos.5 and 6; as possession of plot No.59 is obtained by petitioner by playing fraud on Society and so it is entitled to get the plot back from the petitioner and allot it to 3rd respondent; although there is a distinction between fraud in public law and fraud in private law, in the present case since it relates to fraudulent transfer of the plot in favour of the petitioner depriving eligible members of Society, it ought to be treated as fraud in public law and not as fraud in private law; as fraud vitiates everything, the writ petition ought to be rejected; and although the sale in favour of petitioner may not be void on the ground that the petitioner was a minor as on the date of execution of the sale deed dt.28.01.1988, granting relief to the petitioner would amount to upholding an illegal transaction in his favour. He relied on Commissioner of Customs (Preventive) v. Aafloat Textiles India Private Limited and others18; and Maharaja Chintamani Saran Nath (17 supra) in support of his contentions.
19. In reply, the counsel for the petitioner refuted the contentions raised by the counsel for the respondent Nos.3 and 4 and contended that in ARC.No.38 of 2000 both the petitioner and the Society are parties and a finding had been recorded therein that it was barred by limitation; those findings are binding on the Society in view of the principle of res judicata being applicable as between co-respondents; the Society having filed counter in ARC.No.3 of 2002 opposing the claim of 3rd respondent is estopped from now supporting her in this Writ Petition. He relied on Makhija Construction and Engg. (P) Ltd. v. Indore Development Authority and others19; Mahboob Sahab v. Syed Ismail and others20; and Bojja Subba Rao v. Government of Andhra Pradesh and others21.
20. The other parties were not represented by counsel and did not make any submissions.
21. The 8th respondent is said to have died and there is no representation on his behalf.
22. None appeared for respondent Nos.5 to 7 and 9 to 11.
23. I have noted the submissions of all the parties.
24. The following questions arise for consideration:
(a) Whether the Society can claim to have any right, title or interest in plot No.59 after it allotted the said plot to 8th respondent and executed the sale deeds dt.20.05.1975 and 01.05.1984 in his favour, merely because in 1988 he allegedly surrendered the said plot to it, without any registered document evidencing the transfer?
(b) Whether the 3rd respondent can claim plot No.59 through the Society?
(c) Whether the petitioner has played any fraud on the Society to secure plot No.59 under the sale deed dt.28.01.1988 and if so, whether the said fraud would entitle the Society to deprive the petitioner of the said plot and allot it to 3rd respondent?
(d) Whether the orders passed by respondent Nos. 1 and 2 are valid?
QUESTION (a) :
25. According to me this is the principal question, the answer to which would help in deciding all the questions framed above. Although this question was not raised before respondent Nos.1 and 2 by the petitioner, it is specifically raised by him in para.13 and para.15 of the affidavit filed in support of the writ petition. In view of the fact that this is a pure question of law arising from admitted facts, the petitioner is entitled to raise it in this Writ Petition even if he had not raised it before respondents 1 and 2. (see N.M.Engineer and Others v. Narendra Singh Virdi and Another22 and Hiraji Tolaji Bagwan (since deceased) by his L.R's v. Shakuntala23). As this question goes to the root of the matter, I proceed to answer this question first.
26. From the admitted facts, plot No.59 was allotted to 8th respondent by the Society and was transferred to him under two registered sale deeds dt.20.05.1975 and 01.05.1984. It was explained by counsel for respondent Nos.3 and 4 that there was a difference in extent in the plot No.59 from what was mentioned in the sale deed dt.20.05.1975 and as more extent was found in the said plot, the Society insisted on execution of a further sale deed and that was how the second sale deed dt.01.05.1984 came to be executed in favour of 8th respondent. In my opinion, a rectification deed could have been executed to correct the extent of the plot mentioned in the sale deed dt.28.01.1975 and the consideration for the extra area could have been collected from 8th respondent but execution of another sale deed dt.01.05.1984 was unnecessary. Be that as it may, after the sale deeds were executed, the Society ceased to have any right, title or interest in the said plot. Assuming that the 8th respondent subsequently did not wish to utilise the said plot and intended to relinquish his rights in the said plot in favour of the Society, he ought to have executed a registered conveyance in favour of the Society as required by Section 17 of the Registration Act, 1908 read with the provisions of Transfer of Property Act, 1882 (by way of Sale, Gift or Exchange).
27. In Sneh Gupta v. Devi Sarup and others24, the Supreme Court declared :
"32. Title to a property must be determined in terms of the statutory provision. If by reason of the provisions of the Hindu Succession Act, 1956 the appellant herein had derived title to the property along with her brothers and sisters, she cannot be deprived thereof by reason of an agreement entered into by and between the original plaintiff and the contesting defendants. If a party furthermore relinquishes his or her right in a property, the same must be done by a registered instrument in terms of the provisions of the Registration Act."(emphasis mine) So by merely stating that there was surrender by 8th respondent in its favour, the Society cannot claim to have acquired any right, title or interest in the said plot. It is settled law that title cannot pass by admission (see Ambika Prasad v. Ram Ekbal Rai25). In the absence of a valid registered conveyance by 8th respondent in it's favour, the Society had no right, title or interest in the plot no.59 and mere fact that it had delivered possession to petitioner in 1988 or that it is representing the cause of all it's members would not clothe it with any semblance of right in the said plot giving it the locus to initiate/support any proceeding by 3rd respondent to recover it from petitioner.
28. It may be that on account of a mistake of law, the Society executed the sale deed through respondent Nos.5 and 6 in favour of petitioner on 28.01.1988 but since as on that date, it had no right, title or interest in the property, it could not have conveyed any rights in the plot to him.
29. In Rafique Bibi (dead) by L.Rs. Vs. Sayed Waliuddin (dead) by L.Rs. and Others26, the Supreme Court held that a Court will invalidate an order only if the right remedy is sought by the right person in the right proceedings and circumstances. If at all any person can question the enjoyment of petitioner over the said plot, such a person could only be 8th respondent. But he also would have been able to do so only if he had approached the appropriate forum to evict the petitioner within the prescribed period of limitation.
30. At this point of time, even he cannot seek to recover plot No.59 from the petitioner as admittedly he has taken a stand before 2nd respondent in his counter and written arguments that he is neither owner of the said plot nor has he possession or any right, title or interest in the said plot. Apart from this, assuming that the sale deed dt.28.01.1988 in favour of the petitioner is void (either on the ground that the Society had no right to execute it or on the ground that petitioner is a minor and could not have been a party to the sale deed or a member of the Society), from the said date, petitioner's possession is deemed in law to be hostile possession and being open and continuous for more than 12 years, vested by operation of law (Article 65 r/w Section 27 of the Limitation Act, 1963) title on the petitioner. In Mohd. Kareemuddin Khan (died) and Others Vs. Syed Azam27, a Division Bench of this Court held that a vendee in possession under invalid sale would be entitled to plead adverse possession against his vendor and that his possession would become adverse to the vendor from the date of the sale. In Mungamuru Lakshmidevamma Vs. Land Acquisition Officer and Revenue Divisional Officer, Kavali and Others28, a Division Bench of this Court this Court held:
"19. It is now well settled that in the case of an invalid or void sale, the purchaser would be in possession adverse to the title of the vendor and that even if though the sale itself does not confer any title immediately still the vendee acquires a valid title on the expiry of 12 years from the date of sale by virtue of the provisions of Sec. 27 of the Indian Limitation Act read with Art. 64 thereof. It is also well settled that the position is no different in the case of an oral sale of immovable property of a value more than Rs.100/-. In the latter case also the vendee acquires title by adverse possession on the expiry of 12 years from the date of the oral sale. ... ... ... ... ... ...
25. It is important to note that while in the cases of various other rights to property the Limitation Act only bars the remedy, in the case of a right to institute a suit for possession of any property including immovable property, not only the remedy but also the very right gets extinguished. Sec. 27 is therefore an exception to the general principle that limitation bars only the remedy and does not extinguish the right itself. If therefore the very right to the possession of property is extinguished under Section 27 of the Limitation Act and not merely the remedy, the question arises as to the consequential vesting of the right in some other person or entity. It is well known that the right to property would not be in a hiatus but would have to vest in some person or entity known to law for otherwise it would, by the principle of escheat stand vested in the State. The Privy Council pointed out that the title would operate "in favour of " the party in possession". Lord Romilly observed in Gunga Gobind Mundul v. Collector of 24 Pargunnahs (1866-67)11 Moo Ind App 345 (at 360,361 PC) :
"The title to sue for dispossession of the lands belongs, in such a case, to the owner whose property is encroached upon, and if he suffers his right to be barred by the law of Limitation, the practical effect is the extinction of his title in favour of the party in possession ... ... ...
Thus at the end of the period of 12 years mentioned in Art. 64 of the Limitation, the purchaser under the oral sale would acquire the title of the vendor under sec. 27 of the Limitation Act, 1963. Inasmuch as the provisions of sec. 55(4)(b) are not applicable to such an acquisition of title which is not one of the modes provided by sec. 54 of the Transfer of Property Act, there can be no question of the vendor obtaining any charge on the property after the transfer of title by virtue of the operation of sec. 27 of the Limitation Act."
31. No doubt, the petitioner did not plead adverse possession in his counter before 2nd respondent in the ARC.No.3 of 2002 but that does not help 3rd respondent since such a plea is available to petitioner against 8th respondent only and he could not have raised the said plea against 3rd respondent (who only intended to get plot No.59 from the Society after the ARC is allowed in her favour).
32. Therefore, question (a) is answered in favour of the petitioner and against the respondents.
QUESTION (b) and (c) :
33. In view of the finding on question (a) that the Society got no right, title or interest in plot No.59 from 8th respondent on his mere surrender (which is not by way of any registered instrument), the 3rd respondent cannot claim that the said plot is the property of the Society and she is entitled to its allotment and also for transfer of the same by way of a registered sale deed from the Society.
34. The counsel for the 3rd respondent cited T.Chittemma (16 supra) wherein this Court held :
"Though the petitioner may not have been a party to the fraud, it cannot be ignored that the certificate obtained by her is nothing but the result of fraud. Being the beneficiary of the fraudulent exercise undertaken by the institution, the petitioner cannot plead that she must be treated in isolation. It is well settled principle of law that fraud vitiates everything and no beneficiary of fraud can plead equitable or legal ground to retain the benefit of fraud. It makes little difference whether the petitioner was aware or ignorant about the illegality committed by the institution."
35. He also relied on Maharaja Chintamani Saran Nath Deo (17 supra), the Supreme Court held that if the setting aside of a particular order would revive another illegal order, this Court would refuse the exercise of extraordinary power under Article 226 of the Constitution of India.
36. It is the contention of the respondent Nos.3 and 4 that petitioner had defrauded the Society in collusion with respondent Nos. 5 and 6 and therefore petitioner cannot be allowed to enjoy the fruits of fraud. They vehemently contend that petitioner got himself inducted as a Member of the Society on 27.01.1988 even though he was a minor aged 13 years, that the bye-laws of the said Society did not permit a minor to be a member, that a registered sale deed dt. 28.01.1988 was executed in his favour by respondent Nos.5 and 6 even though their term as President and Secretary of the Society was not subsisting as on that date and that at that time, elections to the managing committee of the Society were being conducted. I have already held on question (a) that the Society had no right, title or interest in plot No.59 as on 28.01.1988 when it executed sale deed in favour of petitioner. As on that day, 8th respondent was the owner under registered sale deeds executed in his favour by the Society which had not been cancelled and there was no registered conveyance executed by him in favour of Society. Even assuming that petitioner had committed fraud on the Society and secured it's membership and obtained a sale deed, no consequences would flow from the alleged fraud as the plot in question was not the property of the Society and it cannot therefore claim that it has suffered any loss by such fraud.
37. In Commissioner of Customs (Preventive) (18 supra), the Supreme Court held that 'fraud' in public law is not same as 'fraud' in private law and the ingredients which establish 'fraud' in commercial transactions would not be of assistance in determining 'fraud' in administrative law. It followed the decision in Khawaja vs. Secretary of State for Home Department29, wherein the House of Lords held that it is dangerous to introduce maxims of common law as to effect of fraud while determining fraud in relation to statutory law. Under Section 17 of the Contract Act, 1872, fraud is an act committed by a party to a contract with intent to deceive another. Where consent to an agreement is caused by fraud, Section 19 of Contract Act, 1872 only makes such an agreement, a contract voidable at the option of the party whose consent was so caused. It does not say that the agreement is void.
38. In Ningawwa v. Byrappa Shiddappa Hireknrabar30, the Supreme Court decreed:
"On behalf of the respondents Mr Naunit Lal, however, stressed the argument that the trial court was wrong in holding that the gift deed was void on account of the perpetration of fraud. It was submitted that it was only a voidable transaction and the suit for setting aside the gift deed would be governed by Article 95 of the Indian Limitation Act. In our opinion, the proposition contented for by Mr Naunit Lal must be accepted as correct. It is well established that a contract or other transaction induced or tainted by fraud is not void, but only voidable at the option of the party defrauded. Until it is avoided, the transaction is valid, so that third parties without notice of the fraud may in the meantime acquire rights and interests in the matter which they may enforce against the party defrauded. "The fact that the contract has been induced by fraud does not make the contract void or prevent the property from passing, but merely gives the party defrauded a right on discovering the fraud to elect whether he shall continue to treat the contract as binding or disaffirm the contract and resume the property. If it can be shown that 'the party defrauded' has at any time after knowledge of the fraud either by express words or by unequivocal acts affirmed the contract, 'his' election is determined for ever. The party defrauded may keep the question open so long as he does nothing to affirm the contact." (Clough v. L. & N.W. Ry.)(emphasis mine) Therefore the respondent no.s 3 and 4 cannot seek to rely on decisions dealing with fraud in public law and apply to it to the present case where the fraud, if any, relating to obtaining membership or a sale deed, is only fraud in private law.
39. In Prapul Chandra Mukpalkar & Another Vs. P. Ramachandra Reddy and Another31, the learned Single Judge of this Court held that where membership of a Housing Cooperative Society was managed and obtained by a party fraudulently, and subsequently the said party obtains the transfer of flat under a registered sale deed from the said Society, it is only the society which can question or challenge it. Where the Society did not do anything except join hands with a third party, who challenged the membership and execution of sale deed in favour of a party, the party would still get a valid title under the sale deed and the third party cannot question it. It also held that any violation of the bye-law may make the transaction voidable as against the Society and it was for the Society to take appropriate steps to challenge the alienation as being contrary to its bye-law and the transactions per se cannot be held to be a void transactions to negate the title of the alienee. This decision applies on all fours to this case. So assuming for the sake of argument, without conceding that the Society has some right in the plot in question, only it could have sued the petitioner and none else. But admittedly, it had taken no steps for cancellation of the sale deed executed by it in favour of the petitioner in 1988 till date pleading fraud. So, in a proceeding initiated by 3rd respondent it is not open to the Society to raise the said plea in order to evict the petitioner as it had allowed its remedy to recover the said plot to get time-barred.
40. As per Art.59 of the Limitation Act, 1963, a suit to set aside a transaction on the ground that it is vitiated by fraud has to be filed within 3 years from the date when the facts entitling the plaintiff to have it cancelled or set aside or rescinded first became known to plaintiff. Section 3 of the Transfer of Property Act, 1882, states :
"a person is said to have notice" of a fact when he actually knows that fact, or when but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it.
Explanation I.-Where any transaction relating to immovable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of such instrument as from the date of registration or, where the property is not all situated in one sub-district, or where the registered instrument has been registered under sub-section (2) of Section 30 of the Indian Registration Act, 1908 (16 of 1908) from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated:
Provided that-
(1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908 (16 of 1908) and the rules made thereunder, (2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under Section 51 of that Act, and (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under Section 55 of that Act.
Explanation II.-Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. Explanation III.-A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material:
Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud."
41. Considering the said provision, the Supreme Court in Janardhanam Prasad v. Ramdas32, held that both possession of the property and existence of a registered deed dealing with the transfer of the said property would constitute a notice to the person claiming a right in the property. It held :
"14. The 1st defendant was a friend of the 2nd defendant. Admittedly, the usual stipulations were knowingly not made in the agreement of sale dated 11-4-1983. The 1st defendant may or may not be aware about the agreement entered by and between the respondent herein. But he cannot raise a plea of absence of notice of the deed of sale dated 4-9-1985, which was a registered document. Possession of the suit land by the appellant also stands admitted. Registration of a document as well as possession would constitute notice, as is evident from Section 3 of the Transfer of Property Act, 1882, which is in the following terms:
"a person is said to have notice' of a fact when he actually knows that fact, or when but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it......"
15. Admittedly, father-in-law and wife of Respondent 1 had been looking after his affairs. They were, therefore, acting as his agents. They would be deemed to have notice of the registration of the document as also the possession of the appellant herein. If they had the requisite notice, in our opinion, Respondent 1, having regard thereto, should have filed a suit for specific performance of contract within the prescribed period. In fact they should have done so expeditiously having regard to the discretionary nature of relief he may obtain in the suit. They did not do so. They waited for more than two years from the date of execution of deed of sale. Even if the suit was not barred by limitation on that account, it was a fit case, where the Court should have refused to exercise its discretionary jurisdiction under Section 20 of the Specific Relief Act, 1963."
42. Admittedly, the plot was transferred in favour of the petitioner under a registered sale deed dt.28.01.1988 and he obtained permission from the Municipal Corporation of Hyderabad on 29.03.1989 and constructed a house therein. In view of Section 3 of the Transfer of Property Act, 1882, both 3rd respondent and Society are presumed to have notice of the rights of petitioner in the plot in view of the registration of the sale deed in his favour and his physical possession thereof. Therefore, it is not open to both of them to plead lack of knowledge of the right of the petitioner in the plot till the year 2000 on the ground that respondent Nos.5 and 6 did not inform the succeeding Managing Committee of the execution of the sale deed in favour of the petitioner, that records were not handed over to the Society by respondent Nos.5 and 6 or there was a ban imposed by the Society on giving of information about its members or the plots in their occupation.
43. The Society has also not taken any steps against respondent Nos.5 and 6 for allegedly colluding with the petitioner. No civil or criminal proceedings have been initiated by it against them. Admittedly the succeeding Managing Committee took charge of the affairs of the Society in February, 1988. It is difficult to believe that all succeeding Managing Committees of the Society after 1988 till November, 2000 were unaware of the possession and enjoyment of the plot by petitioner.
44. I am also of the view that it is not open to the Society in this writ petition to support the claim of 3rd respondent having opposed it before the 2nd respondent. Clearly, the Society is trying to wriggle out of consequences of it's inaction by doing a volte face here by painting itself as a saint and condemning the petitioner as the sole guilty party.
45. It is not disputed that the petitioner was a minor aged 13 years on 28.01.1988, the date of execution of the sale deed in his favour. So it is also doubtful if he can be accused of playing fraud on the Society or its office- bearers either for getting admitted as a member of the Society or for obtaining a sale deed from the Society through respondent Nos.5 and 6.
46. Therefore, it has to be held on question (b) that the 3rd respondent is not entitled to recover the plot from the petitioner and on question (c) that the petitioner cannot be held to be guilty of fraud, being a minor aged 13 years on the date of execution of the sale deed dt.28.01.1988 in his favour. Even if he can be accused of committing fraud, the victim of that fraud can only be 8th respondent and not the Society or 3rd respondent, as the title to the plot as on that date was with 8th respondent only, in the absence of any transfer by registered conveyance in favour of the Society.
QUESTION (d) :
47. One of the important points to be noted in this case is that in the prayer in ARC.No.3 of 2002 filed by 3rd respondent before 2nd respondent, the typed portion did not indicate that the 3rd respondent had claimed plot No.59 in the possession and occupation of the petitioner. The prayer reads as follows :
"The petitioner therefore prays that this Hon'ble Arbitrator may be pleased to verify the original records of the society and enquiry report of the enquiry officer and :
1. to declare all illegal and unlawful allotments and registrations to non-
members as void, illegal and invalid and contrary to APSC Act Rules and by-laws of the Society.
2. to direct the Society to cancel all such illegal unlawful, invalid allotments and registrations as recommended by the Enquiry Officer and re-allot one such plots to the petitioner a senior most member who paid plot advance and total cost before 15-10-64 as desired by the Respondent Society and who is denied and deprived of allotment of plot. The petitioner prays this Hon'ble Arbitrator to direct the Society to allot and register Plot No.198 which is not registered so far in view of the promise and commitment given to the petitioner by the respondent Society through their Notice dt.29-9-1964.
3. Award the cost of the proceedings.
4. grant any other relief or reliefs as are deemed fit and proper in the interest of justice."
48. According to the 3rd respondent, the numerical and words "59 or" were added by hand after the words "... ... to allot and register plot No." and before the words "198 which is not registered so far ..." with the consent of the arbitrator/2nd respondent. This is disputed by the counsel for the petitioner who contended that the words "59 or" were interpolated in the petition by the 3rd respondent in collusion with the arbitrator. It is not the case of 3rd respondent that she had filed an application for amendment of prayer in the ARC by seeking relief in respect of plot no.59. The prayer seeks allotment and registration of a plot "which is not registered so far" and refers to plot No.198. Plot No.59 was admittedly registered in favour of petitioner by then. Therefore, the 3rd respondent also clearly did not seek plot No.59 when she originally filed the ARC. Without filing any amendment application and without any order permitting amendment of the ARC, the words "59 or" could not have been added by 3rd respondent in the prayer in the ARC and consequently the 2nd respondent could not have granted any relief in respect thereof.
49. In A. Jithendernath (9 supra), the Supreme Court held that when a dispute is raised under the provisions of the A.P. Cooperative Societies Act, 1964 by a member claiming an alternative plot in lieu of a plot originally allotted to him, he cannot seek a specific plot without praying for the same. In that case, in a proceeding before the arbitrator under Section 61 of the Act, prayer (a) sought by appellant was "to declare an alternative plot in the same block to an extent of 600 sq. yds. and deliver vacant possession" and prayer (b) was "an injunction be granted restraining the defendant from allotting Plot No.39 to any other member of the Society, pending disposal of the suit." The Court observed:
"48. We have, furthermore, noticed hereinbefore the prayers made by the appellant in the said arbitration proceedings. In view of prayer (a) which was the main prayer ex facie the Registrar acted illegally and without jurisdiction in directing the first respondent to allot Plot No.39. The first respondent made it clear that the plot in question had been allotted in favour of the said Srinivas. The question as to whether he raised constructions thereupon or not was immaterial. He despite such allotment having been made in his favour was not impleaded as a party. He was a necessary party. No award therefore could have been passed in his absence. In any event, so far as Plot No.39 is concerned, the only prayer made by the appellant was an order of injunction. The Registrar while exercising his judicial function had no jurisdiction to pass such an order of injunction in view of prayer (a) made in the application."
It held that the award passed by the Registrar in such an event would be nullity. This judgment squarely applies to the present case and the 2nd respondent could not have granted relief in respect of plot No.59 to 3rd respondent without any prayer in that behalf and this would render his order a nullity.
50. In the ARC, the 3rd respondent referred to several plots including plot No.59 alleging their allotment and transfer illegally and contrary to seniority by office-bearers of Society but the 2nd respondent ignored the pleading in respect of all other plots and confined himself only to plot No.59 which is in the possession and occupation of petitioner.
51. The conduct of 2nd respondent in allowing 3rd respondent to include plot No.59 in the prayer in ARC without any application for amendment of the prayer and granting relief to her in respect of the said plot totally ignoring the pleadings as to other plots and illegalities in respect thereof committed by respondent Nos.5 and 6 indicates a pre-determined and prejudiced attitude against the petitioner and vitiates his order. It is not expected of a quasi- judicial and statutory authority like the 2nd respondent to openly favour the 3rd respondent and adjudicate the matter with prejudice against petitioner.
52. Apart from this, both respondent Nos.1 and 2 did not ask themselves question (a) mentioned above and misdirected themselves by presuming that the Society had right, title or interest in the subject plot when in fact, it had none. By doing so, both of them wrongly came to the conclusion that Society was a victim of fraud allegedly committed by petitioner in collusion with respondents Nos.5 and 6. They ignored the fact that a minor cannot be accused of fraud. They acted irrationally and perversely in holding that Society was a victim of the fraud played by petitioner and that it is entitled to recover the plot from petitioner and transfer it to 3rd respondent. Their findings that Society had a right in the plot (even though it had not taken any steps for cancellation of the registered sale deeds executed by it in favour of 8th respondent on 20.05.1975 and 01.05.1984) and that there was surrender by 8th respondent in favour of Society transferring title of the plot to the Society (even in the absence of a registered conveyance) are shocking and perverse.
53. In Cholan Roadways Ltd. v. G.Thirugnanasambandam33, the Supreme Court held that a quasi-judicial authority must pose unto itself a correct question so as to arrive at a correct finding of fact. A wrong question posed leads to a wrong answer and that in such a case, a case for judicial review is clearly made out.
54. In Heinz India Private Limited and Another Vs. State of Uttar Pradesh and Others34, it was held that judicial review is not so much concern with the decision itself as much with the decision making process; that the Court dealing with the exercise of power of judicial review does not substitute its judgment for that of the legislature or executive or their agents as to the matters within the province of either, that judicial examination is confined to finding out whether the findings of fact have a reasonable basis on evidence and whether such findings are consistent with the laws of the land. It held that so long as the findings recorded by the statutory authorities are not irrational or perverse, and so long as the view taken by them is a reasonably possible view, in exercise of power of judicial review, the Court would not interfere.
55. In Deep Chandra Juneja Vs. Lajwanti Kathuria (Smt) (dead) Through L.Rs.35, it was held that well reasoned concurrent findings and reasons recorded by the prescribed authorities under the statute or by the appellate authority thereunder would not warrant any interference unless there is any illegality, infirmity or error of jurisdiction.
56. It is settled law that the High Court under Article 226 of the Constitution would interfere even with concurrent findings of fact recorded by statutory authorities if they are perverse (see R.M.Yellatti v. Asst. Executive Engineer36, Mohd Shanawaz Akthar v. I ADJ, Varanasi37 and Babu v. Dy. Director of Consolidation38).
57. As I am of the opinion that the orders passed by respondent Nos.1 and 2 are irrational and perverse, they have not asked themselves the right question and misdirected themselves and the 2nd respondent's order appears to have been passed with prejudice against the petitioner and to some how favour the 3rd respondent, there is an error apparent on the face of record. Consequently, I hold that they are unsustainable and are liable to be quashed by issuance of a Writ of Certiorari.
58. Accordingly, the writ petition is allowed and order dt.04.03.2008 in C.T.A.No.5 of 2004 of the 1st respondent and the order dt.15.09.2003 in ARC.No.3 of 2002 of the 2nd respondent are quashed. No costs.
__________________________________ JUSTICE M.S.RAMACHANDRA RAO Date: 24-06-2013