Bangalore District Court
) The Karnataka State Judicial vs ) Sri.Rajesh on 15 November, 2021
KABC010148422010
Govt.of Karnataka TITLE SHEET FOR JUDGMENT IN SUITS
Form No.9(Civil)
Title Sheet for Judgment
in suits (R.P.91)
IN THE COURT OF THE VI ADDL. CITY CIVIL & SESSIONS JUDGE
AT BENGALURU CITY
(CCCH.11)
Dated this the 15th day of November 2021
PRESENT: Sri. Rama Naik, B.Com., LL.B.,
(Name of the Presiding Judge)
O.S.NO.3882/2010
PLAINTIFFS 1) THE KARNATAKA STATE JUDICIAL
EMPLOYEES HOUSE BUILDING CO-
OPERATIVE SOCIETY LIMITED
No.7/2, 'Surya Chambers'
2nd Floor, 1st Main Road
Seshadripuram, Bengaluru -560 020.
Reptd.by its Secretary
2) THE PRESIDENT
THE KARNATAKA STATE JUDICIAL
EMPLOYEES HOUSE BUILDING CO-
OPERATIVE SOCIETY LIMITED
O.S.NO.3882/2010
2
No.7/2, 'Surya Chambers'
2nd Floor, 1st Main Road
Seshadripuram, Bengaluru -560 020
[By Pleader Smt.B.V.Vidyulatha]
/Vs/
DEFENDANTS 1) SRI.RAJESH
S/o.Sri.Rajashekar
aged about 40 years
R/o Yelahanka New Town
Bengaluru -560 064.
[Exparte]
2) SRI.C.SHIVALINGAIAH
S/o.Sri.Channe Gowda
Aged about 70 years
R/o No.421, 12th Cross
Sadashivanagar, Bengaluru
[Since deceased deleted vide
Order dtd.21.11.2015]
3) SMT.LAKKAMMA
Since deceased by LRs.
[By Pleader Smt.S.K.Nagarathna]
(a) SRI.PUTTARAJA
S/o.late Smt.Lakkamma & late
Sri.Y.V.Krishnappa
Aged about 45 years.
(b) SRI.RANGASWAMY
S/o.late Smt.Lakkamma & late
Sri.Y.V.Krishnappa
Aged about 43 years.
(C) SRI.NARAYANA
S/o.late Smt.Lakkamma & late
Sri.Y.V.Krishnappa
Aged about 42 years.
O.S.NO.3882/2010
3
(d) SMT.SEEMA
D/o.late Smt.Lakkamma & late
Sri.Y.V.Krishnappa
Aged about 36 years.
(e) SRI.KUMARA
S/o.late Smt.Lakkamma & late
Sri.Y.V.Krishnappa
Aged about 35 years.
All are R/o No.14/225
Gandhinagar
Near MEC School, Yelahanka
Bengaluru -560 064.
[Exparte]
Date of Institution of the suit : 07.06.2010
Nature of the Suit : Declaration & Injunction
Date of commencement of
recording of evidence : 14.09.2012
Date on which the Judgment
was pronounced : 15.11.2021
Year/s Month/s Day/s
Total Duration : 11 05 08
(RAMA NAIK)
VI ADDL.CITY CIVIL & SESSIONS JUDGE
BENGALURU CITY
O.S.NO.3882/2010
4
JUDGMENT
Suit is filed by Plaintiffs [for brevity 'Society'] for declaring it as the absolute owner of suit schedule property and for handing over vacant possession of suit schedule property to it.
2) Further relief is for declaration that Sale Deed dated 07.10.2002 registered in the name of Defendant No.1 as Document No.BNG(U)- YLNK/10478/2002-03/1-16 dated 26.10.2002 at the Office of the Sub-Registrar at Yelahanka, Bangalore, is null and void and same is not binding on the Society, and consequential relief of permanent injunction restraining Defendants No.1 and 2 from interfering with its peaceful possession and enjoyment of suit schedule property.
3) Facts as stated in plaint are that Society is registered under the Karnataka Co-Operative O.S.NO.3882/2010 5 Societies Act, 1959. Its incorporation is for the purpose of acquiring the land and for distributing the sites so formed by it to its members.
4) It is stated that Society formed a residential layout in the lands bearing various survey numbers of Allalasandra, Chikkabommasandra and Jakkur Plantation villages, Yelahanka Hobli, Bengaluru North Taluk and suit schedule property viz., Site bearing No.1977 measuring East to West 74 + 62/2 feet and North to South 40 feet is carved out in the said residential layout.
5) It is stated that, as per the provisions of the Karnataka Co-Operative Societies Act, 1959 and Bye-laws of Society, sites carved out in the said residential layout can be allotted to its members only after collecting the costs incurred for the acquisition of the land.
O.S.NO.3882/2010 6
6) It is stated that Defendant No.1 is not a member of the Society and he is not eligible for allotment of a site.
7) It is stated that Defendant No.1, having the knowledge that he is not eligible for allotment of site, in collusion with Defendant No.2, has got registered Sale Deed dated 07.10.2002 in respect of suit schedule property in his name. No right, title and interest passed on to Defendant No.1 over suit schedule property and title of suit schedule property remains with Society.
8) It is stated that entire transaction of execution and registration of Sale Deed dated 07.102002 in respect of suit schedule property is vitiated by fraud.
9) It is stated that the execution and registration of Sale Deed dated 07.10.2002 are not O.S.NO.3882/2010 7 preceded by any resolution passed by the Society and hence, the Sale Deed executed in the name of Defendant No.1 by Defendant No.2 is non-est in the eye of law.
10) It is stated that as the possession of suit schedule property remains with the Society, Sale Deed was never acted upon and therefore, there was no occasion for the Society to get to know about the fraudulent transaction entered into between Defendant No.1 and Defendant No.2.
11) It is stated that as Defendant No.2 was the President of the Society during 1999-2005, every care has been taken by Defendants to see that the said collusive transaction of execution of Sale Deed in respect of suit schedule property is not known to the Society.
O.S.NO.3882/2010 8
12) It is stated that the present President of the Society took over the administration of the Society on 23.04.2008.
13) It is stated that in the context of few other fraudulent transactions in respect of certain other properties belonging to Society, an inquiry was ordered by the Assistant Registrar of Co-Operative Societies, Bangalore, and during the month of March 2009, when papers were being checked regarding the sites owned by Society, the fraudulent transaction which took place between Defendants No.1 and 2 came to the knowledge of the present President of Society.
14) It is further stated that Secretary of the Society issued legal notice dated 31.07.2009 to Defendant No.1, calling upon him to give explanation in getting Sale Deed in his name, and same was not claimed by Defendant No.1. If the O.S.NO.3882/2010 9 Sale Deed executed in favour of Defendant No.1 is not interfered with, Society will be put to great hardship and injustice. Hence, pray for decree.
15) Despite issue of summons to Defendant No.1 and even after summons being taken through paper publication, Defendant No.1 failed to appear and therefore, he was placed ex-parte. Defendant No.2 marked appearance through his counsel. Defendant No.3 got impleaded vide Order dated 14.02.2014.
16) Legal heirs of Defendant No.3 were brought on record vide Order dated 05.02.2021 as per applications of the Society. Summonses issued to legal heirs of Defendant No.3 were duly served. As they failed to mark their appearance, they were placed ex-parte.
17) Defendant No.3, in his written statement, states that Defendant No.1 became the owner of O.S.NO.3882/2010 10 suit schedule property as per registered Sale Deed dated 07.10.2002 executed by the Society in favour of Defendant No.1 and he was in possession and enjoyment of the same by mutating khatha in his name and paying tax.
18) It is further stated that, in the year 2005, Defendant No.1 offered to sell the suit schedule property for a valuable sale consideration, and accordingly, he purchased the same from Defendant No.1 under registered Sale Deed dated 28.02.2005.
19) It is stated that he has been put in possession of suit schedule property. Khatha has been changed in his name and he has been paying property tax to the concerned authority.
20) It is stated that after lapse of 8 years, the Society has come up with false suit. Suit filed for O.S.NO.3882/2010 11 declaration of title and for declaring the Sale Deed dated 07.10.2002 as null and void is hopelessly barred by limitation. Hence, prays for dismissal of the suit.
21) Points for determination framed by this Court on 22.02.2014 and Additional Issue on 23.06.2014 are as follows :
1) Whether the Plaintiff proves that the first defendant is not a member of Plaintiff's society and he is not eligible for allotment of site belongs to the Plaintiff socity as per the bye-
laws and as per the provisions of K.C.S.Act?
2) Whether the Plaintiff further proved that the first defendant to knock of the valuable property of Plaintiff society in collusion with the second defendant got the registered sale deed dated 07.10.2002 in respect of the plaint schedule property which is registered on 26.10.2002?
3) Whether the Plaintiff further proves that right, title and possession of the plaint scheduled property still remains with the plaintiff society and sale deed dated 07.10.2002 was never acted upon?
4) Whether the Plaintiff proves that Plaintiff society is the absolute owner of the plaint schedule property?
O.S.NO.3882/2010 12
5) Whether the Plaintiff further proves that the sale deed dated 07.10.2002 registered on 26.10.2002 in the name of the first defendant is null and void and not binding on the Plaintiff?
6) Whether the Plaintiff further proves that Plaintiff is in lawful possession of the plaint schedule property as on the date of suit?
7) Whether the Plaintiff further proves the alleged interference of the defendants as stated in the plaint?
8) What decree or order?
Addl.Issue :
" Whether the Plaintiff in alternative proves that Plaintiff is entitled for the possession of the plaint schedule property from the defendants in case if the court finds that the Plaintiff is not in possession of the plaint schedule property as prayed for ? "
22) Society has got examined its Secretary as PW.1 and got marked Exs.P.1 to P.6 in support of its case.
23) Heard learned Counsel for the Society. Perused the records.
O.S.NO.3882/2010 13
24) My answer to above points and findings on additional Issue are as under :
Point No.1 : In Negative;
Point No.2 : In Negative;
Point No.3 : In Negative;
Point No.4 : In Negative;
Point No.5 : In Negative;
Point No.6 : In Negative;
Point No.7 : In Negative;
Additional Issue : In Negative;
Point No.8 : As per final order, for the following :
REASONS
25) Points No.1 to 7 : These points being interrelated are taken together for discussion.
Suit is being for declaring the Society as absolute owner of suit schedule property and for directing Defendants No.1 to 3 to handover the vacant possession of suit schedule property to O.S.NO.3882/2010 14 Society. Consequent reliefs are for declaring the registered Sale Deed dated 07.10.2002 executed by the Society in favour of Defendant No.1 as null and void and same is not binding on the Society, and for permanent injunction restraining Defendants No.1 and 2 from interfering with peaceful possession and enjoyment of suit schedule property by the Society.
26) Ex.P.2, Sale Deed dated 07.10.2002, makes it clear that Sale Deed has been executed by Defendant No.2 representing the Society in favour of Defendant No.1 and same has been registered in the office of Senior Sub-Registrar, Yelahanka, Bangalore vide Document No.BNG(U)- YLNK/10478/2002-03.
27) Sale Deed is sought to be declared as null and void and same is not binding on the Society. In fact, Society has executed the Sale Deed in favour of Defendant No.1. In the Sale Deed, Defendant O.S.NO.3882/2010 15 No.2, who was the then President of the Society, has represented the Society. Thus, Society is a party to the Sale Deed.
28) Chapter-V of the Specific Relief Act, 1963 deals with 'cancellation of instruments'. Section 31 reads as under :
"31. When cancellation may be ordered - (1) Any person against whom a written instrument is void or voidable; and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, in its discretion, so adjudge it and order it to be delivered up and cancelled."
29) It is, therefore, clear that Society ought to have sought for cancellation of the Sale Deed instead of seeking declaration that the Sale Deed be declared as null and void and same is not binding on Plaintiff.
30) It is to be noticed that Society seeks possession of suit schedule property from O.S.NO.3882/2010 16 Defendant No.1 by paying court-fee under Section 38 of the Karnataka Court-Fees and Suits Valuation Act, 1958 [KCF & SV Act]. Section 38 of KCF & SV Act deals with suits for cancellation of decrees or other document. In that view, it can be fairly said that Society seeks possession of suit schedule property after cancellation of the Sale Deed.
31) In Vikram Ravi Menezes vs. Victor Goveas, [WP No.38868/2013 (GM-CPC), dated 24-04-2015)], the Hon'ble High Court of Karnataka, in para-13, was pleased to hold thus :
"13. ... Any person against whom a written instrument is void/voidable and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable. Therefore, only a person who is a party to the instrument is entitled to such relief. Any person against whom the instrument is void/voidable reasonably apprehends that such instrument if left outstanding, it may cause him serious injury, he may bring a suit to get the document annulled. That is precisely what is done by the plaintiff by filing the suit. A clever drafting would not enable the plaintiff to avoid payment of court fee. Instead of seeking possession after cancellation, the relief is sought by O.S.NO.3882/2010 17 way of mandatory injunction directing the defendant to surrender the schedule property, failing which he would get it through process of court. In other words, after the sale deed is cancelled, the plaintiff wants delivery of possession. Therefore, he ought to have sought for cancellation of the sale deed under Section 31 of of the Specific Performance Act, valued the suit under Section 38 of the Karnataka Court Fee and Suit Valuation Act, and sought for consequential reliefs. ..."
32) In Guru Prasad and Others vs. S.A.Rudraradhya and Others, [WP
No.13120/2008 connected with WP Nos.13121 and 13123/2008 (GM-CPC)], the Hon'ble High Court of Karnataka, in para-7, was pleased to hold as under :
"7. ... However, the suits clearly indicate that the plaintiffs are seeking declaration that the sale deed executed by their alleged Powers of Attorney is not binding on them. The nomenclature or nature may be different. The effect of such declaration amounts to cancellation of sale deed as against the plaintiffs are concerned. In my opinion, the relief sought for by the plaintiffs clearly falls under Section 38 of the Act, as the plaintiffs themselves want to get rid of the sale deed and Powers of Attorney....."
O.S.NO.3882/2010 18
33) Thus, it can be conveniently said that even though Society seeks declaration that Sale Deed executed in favour of Defendant No.1 be declared as null and void and same is not binding on it, in fact, it seeks cancellation of the Sale Deed as envisaged in Section 31 of the Specific Relief Act, 1963 by paying court-fee under Section 38 of the KCF & SV Act, which deals with cancellation of decrees and other document. In that view, there is no impediment to entertain the suit filed by the Society.
34) In the present suit, there are two Plaintiffs. Both are "The Karnataka State Judicial Employees House Building Co-Operative Society Ltd." Plaintiff No.1 is represented by its Secretary, and Plaintiff No.2 is represented by its President.
35) Society's submission is that as an abundant caution President of the Society has been arrayed as Plaintiff No.2.
O.S.NO.3882/2010 19
36) Ex.P.1 is extract of Resolution dated 16.04.2010 passed by the Executive Committee under the Chairmanship of the President of the Society. It goes to show that Executive Committee has taken the decision to institute a suit against 16 persons and instructed the Secretary to take further action in that regard.
37) In fact, no resolution, which specifically authorizes either the Secretary or the President to institute the suit against Defendant No.1 and to prosecute the matter on behalf of the Society, has been produced by the Society.
38) Ex.P.4 is certified copy of bye-laws of the Society. Rule-49 of the bye-laws makes it clear that "the President of the Society shall preside over all the meetings of the committee and in his absence, the Vice-President may preside over the meeting".
O.S.NO.3882/2010 20
39) Rule-51 makes it clear that "the Secretary shall be the paid servant of the society and he may be either full or part time official". His duties have been clearly mentioned in Rule-52, which states that "he shall be the Chief Executive Officer of the Society". Be that as it may.
40) In fact, no such resolution has been produced authorizing the President to represent the Society. There has been a provision in bye-laws that Society to be represented by the Secretary in all litigations relating to the Society under Rule-52 of the Bye- laws. Apart from that, only Executive Committee may by resolution authorize its officials to institute the suit on its behalf and to prosecute the matter before the Court. At a time, two or more persons cannot be authorized as its representative to institute the suit on its behalf and prosecute the same before the Court. In the present case, neither the Secretary nor the President has been O.S.NO.3882/2010 21 specifically authorized to institute the suit on behalf of Society and to prosecute the same. A plain reading of Ex.P.1 makes it clear that such authorization is conspicuously absent in Ex.P.1. Be that as it may. Bye-laws authorizes the Secretary to represent the Society in all litigations relating to the Society. Moreover, there is no dispute about the post and designation held by the Secretary and the President, who represent the Society in the instant suit. Anyway, arraying both the Secretary and the President in the instant suit does not go to the root of the matter, at the most, it can be said that it may be an irregularity and same does not dis-entitle the Society to get the decision on the reliefs claimed in the suit.
41) Society has challenged the Sale Deed dated 07.10.2002 executed by it in favour of Defendant No.1 on the ground that Defendant No.1, in collusion with Defendant No.2, seems to have got O.S.NO.3882/2010 22 registered Sale Deed dated 07.10.2002 in respect of suit schedule property. It is contended that no right, title and interest have been conveyed in favour of Defendant No.1 under the Sale Deed dated 07.10.2002.
42) It is the contention of the Society that Defendant No.1 is not a member of the Society and that execution and registration of the Sale Deed dated 07.10.2002 are not preceded by any resolution passed by the Society.
43) It is necessary to have regard to the bye-laws of the Society. Rule-52 of the Bye-laws at Ex.P.4 deals with duties of the Secretary. It reads as under :
"52. DUTIES OF THE SECRETARY : -
He shall be the chief Executive Officer of the society and his duties shall be : To summon all the meetings of the General Body and the Board.
(b) To record proceedings of such meetings in the minutes book.
O.S.NO.3882/2010 23
(c) To call for first meeting of the newly constituted committee.
(e) To maintain account books, registers and other records, unless otherwise decided by the committee.
(f) To produce records of the society before different authorities concerned with the working of the Society.
(g) To sign all the documents for and on behalf of the Society.
(h) To receive the application for membership, for withdrawal of deposits, and shares etc., and place the same before the Board.
To place before the Board of directors all documents relating to the loan applications from members, all vouchers and receipts pertaining to the receipts and payments statements.
Subject to such rules as may be framed from time to time or any resolution in that behalf, the secretary is empowered to sign all papers to transact business on behalf of the society, to acquire, draw interest or endorse all Government and other remittances, debentures, or shares and to represent the society in all litigations relating to the society.
He shall be responsible for the safe custody of the registers and all other records of the society inclusive of cash, stock and other properties of the society. The overall responsibilities of all financial transactions lies on the secretary. "
O.S.NO.3882/2010 24
44) Chapter-VI of the Bye-laws deals with MISCELLANEOUS PROVISIONS. It reads as under :
"(1) Register of members. (2) Share Register (3) Nomination Register (4) Receipt book. (5) Voucher book. (6) Cash book .(7) General Ledger. (8) Site deposit ledger. (9) Register of allotment of sites. (10) Property Register. (11) Investment Register. (12) Loan Register. (13) Mortgage Register (14) Register of furniture, fixtures and other equipments. (15) Register of Library. (16) Minutes book of the General Body meeting. (17) Minutes book of the Board of directors meeting. (18) Audit rectification register.
DOCUMENTS : The society shall maintain the following documents. (1) Application for members. (2) Letter of resignation of members (3) Application for transfer of shares/interest on the capital. (4) correspondence with the Registering Authority.
(5) Conveyance of property. (6) Agreement and contract deeds. (7) Application for sites with all connected activities.
(8) Approved plans of layout. (9) Copy of the registered bye-law with uptodate amendments.
(10) certificate of Registration. (11) Memberwise loan application, sanction and documentations. (12) Periodical statements (13) Audit memos and audit reports (14) Notice and agenda of committee of management.
O.S.NO.3882/2010 25 (15) Notice and agenda of General Body meeting.
(16) Copies of the K.C.S. Act and K.C.S. Rules.
(17) File containing the
circulars/directions issued by
Registrar/Director of Audit or any other authority connected with the society. "
45) A plain reading of the above rules incorporated in the Bye-laws makes it clear that except presiding over the meetings of the committee, no work has been assigned to the President in the Bye-laws specifically. All that duties cast on the Secretary, who is the Chief Executive Officer of the Society under the Bye-laws.
46) Society's contention is that Defendant No.1, in collusion with Defendant No.2 seems to have got registered Sale Deed dated 07.10.2002. Except this bare statement in plaint, no particulars as to alleged fraud have been exemplified by the Society as is mandated under Order VI Rule 4 of CPC.
O.S.NO.3882/2010 26
47) Order VI Rule 4 of CPC deals with particulars to be given where necessary. It reads thus :
"4. Particulars to be given where necessary.- In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with dates and items if necessary) shall be stated in the pleading."
48) Section 17 of the Indian Contract Act, 1872 defines 'fraud'. It is extracted as under :
"17. 'Fraud defined'.- 'Fraud means and includes any of the following acts committed by a party to a contract, or with his connivance , or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into contract:
(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent."
O.S.NO.3882/2010 27
49) Thus, false assertion, active concealment, promise without intention of performing it, any other deceptive act, or any act declared as fraudulent would constitute 'fraud'.
50) Plaint does not give any particulars of alleged fraud and manner of committing the fraud as envisaged in Section 17 of the Indian Contract Act, 1872.
51) Sale Deed at Ex.P.2 goes to show that it has been executed by the Society. In the Sale Deed, Defendant No.2, being the President of the Society, represented the Society. He has not executed the Sale Deed in his personal or individual capacity.
52) It has been pleaded in the plaint that Defendant No.2 was the President of the Society during the period 1999-2005. Sale Deed at Ex.P.2 was executed in favour of Defendant No.1 on O.S.NO.3882/2010 28 07.10.2002. Thus, it is clear that, at the time of execution of the Sale Deed in favour of Defendant No.1, Defendant No.2 was the President of the Society. In that eventuality, whatever the acts that were done by Defendant No.2 on behalf of the Society are binding on the Society.
53) In order to constitute fraud either Society or its agent shall have played fraud on Defendant No.1 or Defendant No.1 shall have played fraud on the Society as envisaged in Section 17 of the Indian Contract Act, 1872. In the present case, Society is trying to draw a line between President and the Society and to project the President as independent of the Society by contending that Defendant No.1, in collusion with Defendant No.2, has obtained Sale Deed.
54) If it is hypothetically assumed that Defendant No.2 committed fraud on the Society, the O.S.NO.3882/2010 29 commission of fraud cannot be attributable to Defendant No.1 unless the involvement of Defendant No.1 is established. In the present suit, there are no materials before the Court to say that Defendant No.1 played fraud upon the Society. Similarly, to say that Defendant No.2 committed fraud on the Society, no materials have been placed by the Society.
55) Merely because Defendant No.1 is not contested the claim of the Society by filing his written statement, it cannot be said that claim made by the Society is proved. Unless burden lies upon the Society is actually discharged by it by placing cogent evidence, assertion in plaint and affidavit filed in lieu of examination in chief would be considered to be sufficient to discharge the burden.
O.S.NO.3882/2010 30
56) In C.N.Ramappa Gowda vs. C.C. Chandregowda, [(2012) 5 SCC 265], the Hon'ble Supreme Court was pleased to hold as under :
"Non-filing of written statement should not have penal consequence. Court should proceed cautiously and exercise its discretion in a just manner. Even in absence of written statement, burden of proof would remain on plaintiff and his mere assertion in plaint affidavit would not be sufficient to discharge the burden. Where in view of non-filing of written statement despite repeated opportunities given to defendant, decree was passed without going into merits, merely on basis of affidavit filed by plaintiff, in a case involving disputed questions of fact, it would amount to a penal decree. If plaint indicates disputes questions of facts, court should require plaintiff to lead evidence, and on independent examination thereof, should it pass a judgment and decree. If, however, court is satisfied that plaintiff's case is unimpeachable even without evidence in view of admission of defendants and that defendants were adopting delaying tactics, then it can pass on uncontested decree."
57) In the instant case, it would be clear that there are no material particulars in the pleadings regarding the alleged fraud and there are no evidence as to manner of committing the alleged fraud.
O.S.NO.3882/2010
31
58) In Patel Tippeswamy vs. Smt.
Gangamma and Others, [2002(3) Kar.L.J.
512B], the Hon'ble High Court of Karnataka was pleased to hold that ".... A party pleading fraud and misrepresentation in respect of a transaction must give material particulars of allegations, and in absence of such particulars, his plea is to be rejected..."
59) In Ranganayakamma and Another vs K.S.Prakash (deceased) by L.Rs and Others, 2006(3) Kar.L.J. 177A (DB)], the Hon'ble High Court of Karnataka was pleased to hold that "... General allegation without particulars are not sufficient".."
60) In Mariyappa K.S. vs. Siddalinga Shetty, 1989(1) Kar.L.J. 150 (DB)], the Hon'ble High Court of Karnataka was pleased to hold that ".. Absence of material particulars regarding fraud O.S.NO.3882/2010 32 and collusion, it is not possible to hold that plaint contains necessary averments as to fraud and collusion..."
61) Society has placed reliance on the judgment of the Hon'ble Supreme Court in the case of S.P.Chengalvaraya Naidu (Dead) vs. Jagannath (Dead) by L.Rs., [AIR 1994 SC 853], wherein the Hon'ble Supreme Court was pleased to hold that "judgment or decree obtained by playing fraud on the court is a nullity".
62) It is true that 'fraud' vitiates all solemn transactions. However, before holding that fraud is committed, the same shall be proved by giving material particulars and by placing cogent evidence. In absence of proving the alleged fact of fraud, it cannot be said that fraud is committed. Averment in plaint that Defendant No.1, in collusion with Defendant No.2, has obtained the Sale Deed in O.S.NO.3882/2010 33 his favour, is a mere assertion, on the basis of which, no inference can be drawn that fraud has been committed in obtaining the Sale Deed by Defendant No.1 in absence of proving the said fact.
63) It is the contention of the Society that Defendant No.1 is not the member of the Society and he is not eligible for allotment of the site.
64) Society contends that membership number '534' belongs to one Smt.Sadhana Desai, who, after paying the necessary fees and after following the necessary formalities, has become the member of the Society.
65) In Ex.P.2, it has been recited that Defendant No.1 is the member of the Society and his membership number is shown as '534'. It appears that the Society has taken the contention that membership number '534' belongs to one O.S.NO.3882/2010 34 Smt.Sadhana Desai on the basis of Sale Deed in which the membership number of Defendant No.1 is shown as '534'.
66) Society has produced the Membership Register extract relating to membership number '534' at Ex.P.5 and same is shown in the name of one Smt.Sadhana Desai. It is to be noticed that Sale Deed was prepared and executed by the Society by mentioning the membership number of Defendant No.1 as '534'. It is the Society, who has to explain such anomaly in mentioning the membership number in Sale Deed at Ex.P.2. Without there being explaining such anomaly in mentioning the membership number in Ex.P.2, Society simply contends that membership number '534' belongs to one Smt.Sadhana Desai. When both documents namely, Sale Deed and Membership Register were prepared by the Society, burden lies upon the Society to explain the same O.S.NO.3882/2010 35 and same has not been discharged by the Society. That being the case, there is no substance in the contention of the Society that Defendant No.1 is not the member of the Society.
67) It is the further contention of the Society that no resolution was passed by the Board of the Society authorizing Defendant No.2 to execute the Sale Deed in favour of Defendant No.1 and that no sale consideration was paid by Defendant No.1.
68) It is important to note that it is the Society and Society only can say that whether resolution was actually passed or not in execution of the Sale Deed in favour of Defendant No.1 and other than Society, no one can say about the affairs of the Society.
69) Bye-laws requires that all the books and documents shall be maintained by the Secretary, O.S.NO.3882/2010 36 who is the Chief Executive Officer of the Society as provided in Bye-laws.
70) Sale Deed at Ex.P.2 specifically recites that "vendee being one such member applicant, has been allotted a Site No.1977, in 40' feet x 60' feet, dimension at the above layout for consideration amount of Rs.76,000/- and the vendee has paid the said amount from time to time which vendor Society hereby acknowledge subject to the condition that the additional charges towards establishment of amenities and other funds created....."
71) Society has not produced share register; nomination register; receipt book; voucher; cash book; general ledger; site deposit ledger; register of allotment of sites; property register; minutes of book of the General Body meetings; minutes of book of the Board of Directors meeting; and audit O.S.NO.3882/2010 37 rectification register. These documents are required to be maintained by the Secretary as contemplated in Bye-laws.
72) Had the Society produced such documents and had they disclosed that Defendant No.1 is not the member of the Society and that he had not paid the consideration amount and that no resolution was passed to execute the Sale Deed, then it would be relevant to say that Defendant No.1 is not the member of the Society and that he has not paid the consideration amount and that Sale Deed has been executed by Defendant No.2 in favour of Defendant No.1 without there being passing of resolution.
73) Society could have produced share register, nomination register, receipt book, voucher, cash book, general ledger, site deposit ledger, register of allotment of sites, property register, minutes of book of the General Body meetings, minutes of O.S.NO.3882/2010 38 book of the Board of Directors meeting, and audit rectification register, and on production of the said documents, if they disclose that no such membership number as mentioned in Ex.P.2 was given to Defendant No.1, then it could be said that membership number '534' was not given to Defendant No.1.
74) It is to be noticed that Society has filed Memo along with list of names and addresses of the allottees before the Hon'ble High Court of Karnataka in WP No.40994/2004 as per the report of its Board of Directors dated 17.06.2006 [said document has been marked as Ex.D.1 in O.S.No.3880/2010 filed by the Society]. In the list of allottees, at Sl.No.128 Defendant No.1 has been shown as allottee of Site No.1977, which is the suit schedule property.
O.S.NO.3882/2010 39
75) That being the case, no occasion has arisen to say that Defendant No.1 is not the member of the Society and that no consideration was paid to the Society and that the Sale Deed was executed by Defendant No.2 without there being any resolution. When the Society challenges the Sale Deed executed in favour of Defendant No.1 by Defendant No.2 on the ground of fraud, it is its bounden duty to produce all such documents. On the contrary, all such documents have been withheld by the Society.
76) Section 114(f) and (g) of the Indian Evidence Act, 1872 specifically state that the Court may presume that the common course of business has been followed in particular cases and that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it.
O.S.NO.3882/2010 40
77) In absence of production of such documents, presumption would naturally arise that common course of business has been followed in the case of Defendant No.1 and in that view, it can be fairly said that if said documents were produced by the Society, the same would be unfavourable to the Society. In that view, there is no reason to accept the Society's contention that no resolution was passed by the Society for execution of the Sale Deed by Defendant No.2 in favour of Defendant No.1 and that no consideration was paid to the Society.
78) It is to be noticed that Bye-law No.53 makes it clear that the Society shall allot sites/flats/houses only to members who are eligible as per bye-law No.10. Bye-law No.10 deals with rights of members. It states that the member does not already own a site or plot or house. A plain reading of Bye-laws, it would make it clear that there is no specific bar in O.S.NO.3882/2010 41 the Bye-laws to allot the sites to non-members. Be that as it may.
79) In Binny Mill Labour Welfare House vs. D.R.Mruthyunjaya Aradhya, [ILR 2008 Kar 2245], the Hon'ble High Court of Karnataka was pleased to hold thus :
"36. .... In this regard it is useful to refer to a judgment of the Supreme court in the case of Co-Operative Central Bank Ltd. And Ors. V. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad and Ors. Wherein it has been held as under :
The bye-laws of a co-operative society framed in pursuance of the provisions of the Act cannot be held to be law or to have the force of law. It has no doubt been held that, if a statute gives power to a Government or other authority to make rules, the rules so framed have the force of Statute and are to be deemed to be incorporated as a part of the statute. That principle, however, does not apply to bye- law of the nature that a co-operative society is empowered by the Act to make. The bye-laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a society. They are of the nature of the Articles of Association of a company incorporated under the Companies Act. They may be binding between the persons affected by them, but they do not have the force of a statute.
O.S.NO.3882/2010 42
37. In view of the aforesaid authoritative pronouncement of the Supreme court the said bye-law cannot be equated to law, rules or regulations. The said bye-laws only govern the internal management, business or administration of a society.
They are in the nature of Articles of Association of a Company incorporated under the Companies Act. It has no statutory force. Any act of the society contrary to the said bye-law ipso facto do not render the said act void and without authority. When the society enters into a contract with third parties or outsiders those outsiders are in no way bound by the said bye-law. The society is a body corporate by name having a perpetual succession and a common seal and when a contract is entered into by the office bearers of the society i.e., the President, the Secretary and the Treasurer on behalf of the society with the third parties, it is binding on the society even though it is contrary to the bye-law....."
80) Sale Deed at Ex.P.1 recites that vendee has been put in possession of suit schedule property. After institution of the suit, plaint prayer has been substantially amended by the Society to the effect that Defendant No.1 be directed to handover the vacant possession of suit schedule property to the Society.
O.S.NO.3882/2010 43
81) Having considered above aspects of the matter, it can be fairly said that Society is not in lawful possession and enjoyment of the suit schedule property as on the date of the suit. Hence, question of interference by Defendant No.1 does not arise at all.
82) Defendant No.3 has taken the specific contention that Plaintiff's suit for declaration of Sale Deed dated 07.10.2002 as null and void is barred by limitation.
83) Section 3 of the Limitation Act, 1963 deals with bar of limitation. Section 3(1) reads as under :
"3. Bar of limitation.- (1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence."
84) In Lachhman Singh vs. Hazara Singh, [(2008) 5 SCC 444], the Hon'ble Supreme Court O.S.NO.3882/2010 44 was pleased to hold that "Limitation is a question of jurisdiction. Section 3 puts an embargo on the Court to entertain a suit if it is found to be barred by limitation."
85) Thus, it would be clear that even though limitation is not set up as a defence, it is the bounden duty of the Court to see that claim made by Plaintiff is barred by limitation as contemplated under Section 3 of the Limitation Act, 1963.
86) In the instant case, Defendant No.3 has specifically contended that suit filed by Plaintiff is barred by limitation. However, no issue relating to the contention of Defendant No.3 has been framed. Same would not disable the Court to see that whether suit filed by Plaintiff is barred by limitation.
87) Society's contention is that cause of action for the suit arose during March 2009, when the O.S.NO.3882/2010 45 present President of the Society got the knowledge about the execution and registration of the fraudulent, fabricated and collusive Sale Deed registered in the name of Defendant No.1.
88) Article 59 of the Limitation Act, 1963 states as follows :
Description of suit Period of Time from which period limitation begins to run
59. To cancel or set Three Years When the facts entitling aside an instrument or the Plaintiff to have the decree or for the instrument or decree rescission of a contract cancelled or set aside or the contract rescinded first become known to him.
89) Society seeks the declaration of the Sale Deed as null and void on the ground of fraud. It is to be noticed that no such alleged fraud allegedly committed by Defendants No.1 and 2 has been proved by the Society in the instant suit. Hence, fact of alleged fraud as contended by the Society O.S.NO.3882/2010 46 cannot be availed of by the Society as knowledge of execution of Sale Deed.
90) Sale Deed at Ex.P.2 makes it abundantly clear that Society has registered the Sale Deed in favour of Defendant No.1 through its President, Defendant No.2 and same has been got registered in the Office of Senior Sub-Registrar, Yelahanka, Bangalore vide Document No.BNG(U)- YLNK/10478/2002-03/1-16, who, in turn, sold to Defendant No.3, who has been subsequently impleaded by Plaintiff.
91) Section 3 of the Transfer of Property Act, 1882 deals with the word "Notice". It states that "A person is said to have notice" of a fact when he actually knows that fact, or when, but for wilful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it."
O.S.NO.3882/2010 47
92) Explanation-I says that 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 shall be deemed to have notice of such instrument as from the date of registration.
93) Explanation-II says that any person acquiring any immovable property shall be deemed to have notice of the title of any person who is for the time being in its actual possession.
94) Explanation-III says that a person shall be deemed to have notice of any fact if his agent acquires notice thereof while acting on his behalf in the course of business to which that fact is material.
95) Proviso to Explanation III says that if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against O.S.NO.3882/2010 48 any person who was a party to or otherwise cognizant of the fraud.
96) Section 229 of the Indian Contract Act, 1872 provides that "any notice given to or information obtained by the agent, provided it be given or obtained in the course of the business transacted by him for the principal, has the same legal consequence as if it had been given to or obtained by the principal".
97) Thus, it would be clear that registration of a document is notice of all the facts stated in that document. Actual possession of the immovable property operates as constructive notice of the title to property. Notice to agent amounts to notice to principal.
98) In the present suit, Sale Deed was executed on 07.10.2002, which contains the recital that possession of suit schedule property was O.S.NO.3882/2010 49 transferred to Defendant No.1. Society's only plea is that Sale Deed has been obtained by fraud. It has failed to prove the alleged plea of fraud. In that circumstance, execution and registration of Sale Deed by Defendant No.2 being the President of the Society shall be deemed to have been within the knowledge of the Society as on the date of execution and registration of the Sale Deed.
99) In Lachhman Dass vs. Jagat Ram, [(2007) 2 SCR 980], the Hon'ble Supreme Court was pleased to hold that "the execution of a registered deed of sale is also to be treated as a notice in terms of Section 3 of the Transfer of Property Act, 1882."
100) Thus, Society, being the party to the Sale Deed cannot say that it is ignorant about the Sale Deed. In that view, it ought to have filed the suit within three years from the date of execution of the O.S.NO.3882/2010 50 Sale Deed. However, same has been filed after lapse of 7 years, and possession has been sought after lapse of 11 years by amending the plaint.
101) Society's contention is that the present president came to the knowledge of the Sale Deed during the March 2009. Said contention has been falsified by list of allottees produced before the Hon'ble High Court of Karnataka in WP No.40994/2004. It makes it clear that as per the report of the Board of Directors of the Society dated 17.01.2006, Society filed list of the names of the allottees before the Hon'ble High Court of Karnataka. Said list includes the name of Defendant No.1 also. In that view, there is no substance in the contention of the Society that it came to know about the Sale Deed in March 2009.
102) Assuming that Society did not notice the execution of Sale Deed on 07.10.2002, if the report O.S.NO.3882/2010 51 dated 17.01.2006 of the Board of Directors of the Society is considered as date of knowledge, suit ought to have been filed on or before 17.01.2009. However, the same has been filed on 07.06.2010 for declaring it as absolute owner of suit schedule property and possession has been sought for in the year 2014. In that count also, suit filed by the Society is barred by limitation. Accordingly, I answer the above Issues.
103) Additional Issue framed on 23.06.2014 :
Society seeks alternative relief of possession if Defendant No.1 is found to have been in possession of suit schedule property. Defendant No.1 was in lawful possession of suit schedule property on the basis of the Sale Deed validly executed by the Society and Defendant No.3 has claimed that he is the owner in possession of suit schedule property under registered Sale Deed 28.02.2005. Society has failed to prove that Sale Deed is vitiated by fraud.
O.S.NO.3882/2010 52 Moreover, suit has been filed after lapse of 7 years and possession has been claimed after lapse of 11 years as observed above and same has been barred by limitation. In that view, Society does not deserve for the relief as prayed in the plaint, accordingly, I answer the above additional issue in the negative.
104) Point No.8 : For the foregoing discussion and findings, I proceed to pass the following :
ORDER (1) Suit filed by Plaintiffs is hereby dismissed.
(2) No order as to costs.
(3) Draw Decree accordingly.
(Dictated to the Judgment Writer directly on computer, typed matter corrected and then pronounced by me in open court, on this the 15th day of November 2021) (RAMA NAIK) VI Addl.City Civil & Sessions Judge Bengaluru City O.S.NO.3882/2010 53 ANNEXURE I. List of witnesses examined on behalf of :
(a) Plaintiff's side :
P.W.1 - Sri.K.A.Sudhakar, dtd.05.04.2021
(b) Defendants side : N I L II. List of documents exhibited on behalf of :
(a) Plaintiff's side :
Ex.P.1 Resolution of the Society dtd.16.04.2010 Ex.P.2 Certified copy of Sale Deed dtd.07.10.2002 Ex.P.3 Notice dtd.31.07.2009 issued by Society along with RPAD Cover Ex.P.4 Notary attested copy of model Bye-law of House Building Co-operative Societies Ex.P.5 Notary attested copy of Membership Register extract Ex.P.6 Notary attested copy of Elegibility Certificate dtd.20.09.2005 issued by Department of Co-oprative Societies
(b) Defendants side : N I L VI Addl.City Civil & Sessions Judge Bengaluru City O.S.NO.3882/2010 54