Karnataka High Court
Sri Vijayachandra vs State Of Karnataka on 5 April, 2023
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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WP No. 57108 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF APRIL, 2023
BEFORE
®
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 57108 OF 2014 (CS-DAS)
BETWEEN:
1. SRI VIJAYACHANDRA
S/O ANANTHA KRISHNA
AGED ABOUT 45 YEARS
R/A ZEN GARDEN
AJJARAKADU VILLAGE
UDUPI TALUK AND DISTRICT-576107
...PETITIONER
(BY SRI. K A ARIGA.,ADVOCATE)
AND:
1. STATE OF KARNATAKA
DEPARTMENT OF CO-OPERATIVE
Digitally signed MS BUILDING
by
NARAYANAPPA BANGALORE
LAKSHMAMMA REPRESENTED BY ITS HONBLE MINISTER OF CO-
Location: HIGH OPERATIVE
COURT OF
KARNATAKA 2. THE ASSISTANT COMMISSIONER
CO-OPERATIVE SOCIETY
KUNDAPUR TALUK
UDUPI DISTRICT
3. THE PRIMARY CO OPERATIVE AGRICULTURAL AND
RURAL DEVELOPMENT BANK
UDUPI TALUK AND DISTRICT
4. SRI SURESH NAIK
S/O KALU NAIK
AGED MAJOR
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WP No. 57108 of 2014
R/A NO.1/28A
KANCHINA BAIL HOUSE
HIREBETTU POST
VIA PARAKALA
UDUPI TALUK AND DISTRICT
5. SRI KALU NAIK
S/O LATE VITTU NAIK
AGED MAJOR
R/A NO.1/28A
KANCHINA BAIL HOUSE
HIREBETTU POST
VIA PARAKALA
UDUPI TALUK AND DISTRICT
6. SRI BABANNA NAIK
S/O LATE VITTU NAIK
AGED MAJOR
R/A NO.1/28A
KANCHINA BAIL HOUSE
HIREBETTU POST
VIA PARKALA
UDUPI TALUK AND DISTRICT
...RESPONDENTS
(BY SRI. .,ADVOCATE)
THIS WP FILED PRAYING TO.QUASH THE ORDER
DTD.11.11.2014 VIDE ANNEX-A PASSED BY THE R-
1.GRANT AN INTERIM ORDER TO STAY THE ORDER
PASSED BY THE R-1 DTD.11.11.2014 VUDE ANNEX-
A.POST THIS W.P. FOR PRELIMINARY HEARING BEFORE
SINGLE JUDGE ALONG WITH C.P.NO.6754/14.
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WP No. 57108 of 2014
THIS PETITION, COMING ON FOR FINAL HEARING,
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
1. The petitioner is before this Court seeking for the following reliefs:
a. Issue a Writ or direction in nature of Certiorari quashing the order dated 11.11.2014 in Revision Petition No.CO/18/CAP/2013 (Annexure-A) passed by the 1st Respondent.
b. Issue any other appropriate writ or direction as this Hon'ble Court deems fit and proper to grant in the circumstances of the case.
2. The petitioner claims to be an auction purchaser of the property, which is claimed to belong to respondent Nos.4 to 6. Respondent No.4 had initially borrowed a sum of Rs.2,40,000/- from respondent No.3/Bank as regards which respondent No.5/Kalu Naik had mortgaged the property bearing Sy.No.153/2 measuring 2 acres 80 cents at Hirbetttu Village, Udupi Taluk and District. The borrower having defaulted on the repayment of the loan, dispute was raised wherein an arbitrator was appointed and an award came to be passed in favour of the Bank. -4- WP No. 57108 of 2014 In execution of the said award, the aforesaid land came to be sold through auction by respondent No.3 on 29.09.2005, wherein the petitioner was the successful bidder.
3. Thereafter, respondent No.2 confirmed the auction sale vide its order dated 21.07.2010, which was challenged by respondent No.6 herein along with respondent No.4 as also two other sons of Kalu Naik in W.P.No.23599/2010 on the ground that the land being a granted land, the same could not be auctioned and provision of Section 4 of the Karnataka Scheduled Caste and Scheduled Tribes Act and Prohibition of Transfer of Certain Lands Act, 1978 (PTCL Act) would be applicable thereto and as such, in the said writ petition the confirmation of the auction was prayed to be quashed.
4. This Court vide its order dated 02.08.2011, dismissed the petition leaving it open to the petitioner to pursue not only the statutory remedy under the Karnataka Co- operative Societies Act, 1960 (for short 'KCS Act') but also to invoke the provision of the PTCL Act since those -5- WP No. 57108 of 2014 questions could not be considered on account of the auction sale being at a nascent stage.
5. Subsequent to the disposal of the said writ petition in W.P.No.23599/2010, respondent No.6 initiated proceeding before respondent No.2 to transfer the mutation in his name, which was so done on 12.05.2011 and thereafter, followed up with a filing of a suit for partition in O.S.No.381/2011, wherein a decree was passed in favour of respondent No.6 declaring him to be entitled for 1/5th share.
6. In the meanwhile, the auction was confirmed in favour of the petitioner and it is challenging the same that a revision petition came to be filed on 06.08.2013 before respondent No.1 seeking for revising the order of confirmation of sale, which came to be so revised vide order dated 11.11.2014 at Annexure-A, aggrieved by which the petitioner is before this Court seeking for the aforesaid reliefs.
7. Sri. K.A.Ariga, learned counsel for the petitioner would submit that:
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7.1. The petitioner having participated in the auction in the year 2005 itself and having remitted the amount, the auction has been confirmed in favour of the petitioner.
7.2. Respondent Nos.4 to 6 from time to time sought to create obstacles to the petitioner from enjoying the fruits of the said auction. The petitioner being a bonafide purchaser of the property for value during a public auction, has been deprived of the use of the property on account of various litigation which had been filed by respondent Nos.4 to 6 in collusion with each other.
7.3. The said Revision Petition was not maintainable inasmuch as the auction sale having been confirmed, an alternative remedy was available to respondent No.6 which was not exercised. The auction sale having occurred in the year 2005. The revision petition having been filed in the year 06.08.2013, was highly belated and respondent -7- WP No. 57108 of 2014 No.1 ought not to have exercised revisional powers under Section 108 of the KCS Act, inasmuch as any such application ought to have been filed within a period of six months.
7.4. On these grounds, he submits that the above petition is required to be allowed, the order passed by respondent No.1 in the revision petition is required to be set aside and the auction confirmation should continue in favour of the petitioner.
8. Sri. Jayakumar S. Patil, learned Senior Counsel appearing for respondent No.6 would submit that:
8.1. In W.P.No.23599/2010, this Court had observed that there was no locus on part of the petitioner therein to agitate the issues and there was no declaration of title or ownership in their favour. It is in that background that a suit in O.S.No.381/2011 had been filed, which ended up in a decree in favour of respondent No.6.
-8-WP No. 57108 of 2014 8.2. The filing of the said suit and a decree passed inures to the benefit of respondent No.6. The actions taken by respondent No.6 for filing of a suit and/or for mutation are only to preserve and protect the interest of respondent No.6 which cannot be faulted.
8.3. The subject land being a granted land and the revision petitioner being a person belonging to the Scheduled Caste, this Court ought to look at the intention behind the PTCL Act and as such, try and safeguard the interest of a person belonging to that class.
8.4. The interest of the petitioner would be protected on account of the entire amount due on the loan having been remitted by respondent No.6 along with five percent solation, which could be paid to the petitioner. Such amount having been deposited in the year 2014, respondent No.1 has taken the intention behind the PTCL Act in exercising the -9- WP No. 57108 of 2014 powers under Section 108 of the KCS Act and set aside the confirmation.
8.5. In this regard, he relies upon the decision of this Court in the case of B.S.Sheshagiri Setty and others Vs. State of Karnataka and others reported in 2016(1) KLJ 1 to contend that under Section 108 of the KCS Act, the powers could be even exercised by a State Government suomoto at any time and there is no restriction as such for a period of six months which would apply to the State Government. The powers being exercised by a State Government could be considered to be that which has been exercised suomoto and not pursuant to an application filed by respondent No.6. On these grounds, he submits that the petition is liable to be dismissed.
9. Though respondent Nos.3, 4 and 5 have been served, none has entered appearance for them.
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WP No. 57108 of 2014
10. Learned Additional Government Advocate (AGA) submits that the mortgage has been affected by respondent Nos.4 and 5, who do not have exclusive rights over the property. This factor has been taken into account by respondent No.1 while passing the impugned order and as such, the said order is proper and correct and does not require any interference
11. Heard Sri. K.A.Ariga, learned counsel for the petitioner, Smt. A.R.Sharadamba, learned AGA for respondent Nos.1 and 2, Sri. Jayakumar S. Patil, learned Senior counsel for respondent No.6 and perused the papers.
12. It is not in dispute that the property had been mortgaged to respondent No.3 /Co-operative Bank. It is also not in dispute that the said property had been granted in favour of Vittu Naik in in the year 1960. It is further not in dispute that the loan which had been obtained by respondent Nos.4 and 5 was not paid, requiring respondent No.3/Bank to initiate action against the property and in pursuance thereof respondent No.3 had
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WP No. 57108 of 2014also obtained permission from the State Government on 05.12.2009 for conducting the an auction.
13. What is required to be seen by this Court is whether respondent No.6 could raise an objection in respect of the auction sale which has been carried out as regards the aforesaid property.
14. The property having been mortgaged and brought on sale, on an earlier occasion, respondent No.6 along with respondent No.4 and two other sons of Kalu Naik had filed a writ petition in W.P.No.23599/2010 seeking for setting aside the auction conducted by respondent No.2. This Court, vide its order dated 02.08.2011, dismissed the said petition on the ground that the challenge to the confirmation order was at a nascent stage and the same could not be at that stage challenged. If in terms of Section 4 or 7 of the PTCL Act further auction was taken for confirmation the petitioner could be avail of the statutory remedy under the KCS Act and the PTCL Act. It was thereafter that a suit in O.S.No.381/2011 came to be filed by respondent No.6.
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WP No. 57108 of 2014
15. The contention of Sri.Jayakumar S. Patil, learned Senior counsel for respondent No.6 is that respondent Nos.4 and 6 did not have any right to mortgage the property and that the methodology of mortgage has been used indirectly to transfer the property so as to overcome the embargo imposed under the KPTCL Act.
16. A perusal of the plaint in O.S.No.381/2011 indicates that in the plaint which was filed post the disposal of the writ petition in W.P.No.23599/2010, an allegation has been made by respondent No.6 that respondent No.5 is proposing to transfer the property to intending buyers without the knowledge of respondent No.6 in order to make unlawful gain by selling such properties. The further admission made by respondent No.6 in the said plaint indicates that respondent No.5 being the elder member of the joint family, transferred Khata in his name and that he was running the affairs of the family.
17. In the said suit, a decree came to be passed on 30.07.2014, wherein it is categorically observed that after service of summons, defendants had appeared through
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WP No. 57108 of 2014their respective counsel and filed a memo on 06.01.2014 stating that they have no objection to pass the preliminary decree as prayed for in the suit. This memo, has been filed by Kalu Naik and others succumbing to a decree passed in the said O.S.No.381/2011. As such, the submission now made by Sri. Jayakumar S. Patil, learned Senior counsel that the said Kalu Naik /respondent No.5 is acting contrary to the interest of respondent No.6, cannot be believed and is contrary to the averments made in the aforesaid plaint. It at all the same clearly discloses and establishes the collusion between them.
18. A perusal of the cause title in W.P.No.23599/2010 indicates that the same had been filed by respondent No.6 along with the sons of Kalu Naik and all of them were prosecuting the matter together. A perusal of the decree in O.S.No.381/2011 indicates that the said Kalu Naik had succumbed to a preliminary decree of partition. In such a background when they have been acting together, it cannot be contended that the mortgage was effected by Kalu Naik of his own accord and/or that he was acting contrary to the interest of respondent
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WP No. 57108 of 2014No.6. Both the legal proceedings indicate that they were acting in concert with each other.
19. Such being the situation, the filing of the revision petition and the reasoning in the order passed in the revision petition that the rights of respondent No.6 were not considered while confirming the auction, in my opinion, is again an abuse of the process of the Court resorted to by respondent No.6 in collusion with respondent Nos.4 and 5 as done previously.
20. The submission of Sri. Jayakumar S. Patil, learned Senior Counsel is that the amounts due to the petitioner have already been deposited along with five percent of the interest, and the same would protect the interest of the petitioner.
21. This Court, would come to the rescue of any person who has come to the Court with clean hands and has not suppressed any facts. In the present case, as referred to supra, respondent No.6 is both guilty of suppressio veri and suggestio falsi inasmuch as, by colluding with each other, respondent Nos.4 to 6 and the other family
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WP No. 57108 of 2014members have obtained a decree of partition in O.S.No.381/2011 and thereafter, they contend that Kalu Naik is acting contrary to the interest of Babanna Naik/respondent No.6.
22. The manner in which those proceedings and pleadings are filed would indicate that the properties were joint family properties and Kalu Naik is the kartha of the family in whose name the property is vested. That being the case, the revisional authority has, without appreciating the said fact, come to the conclusion that there are no documents which have been produced to establish the rights of the said Kalu Naik in the property. In the very plaint which had been filed in O.S.No.381/2011, respondent No.6, the revision petitioner has categorically admitted that Kalu Naik was the elder and Kartha of the family. Such being the case, the findings of the revisional authority on that basis cannot be sustained.
23. The next submission made by Sri. Jayakumar S. Patil, learned Senior Counsel is that the provision of the PTCL Act, would apply and as such, the property could not
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WP No. 57108 of 2014have been brought to auction and thereafter sold to the petitioner. The restriction contained in Section 4 of the PTCL Act is only applicable insofar as a voluntary transfer is concerned. In terms of Section 7 of the said Act, there is an exemption which has been provided for categorically stating that nothing in the act would apply to the transfer of granted land in faovur of the government, the central government, a local authority, or a bank, either before or after the commencement of this Act. Section 7 of the PTCL Act is reproduced hereunder for easy reference:
"7. Exemption.- Nothing in this Act shall apply to the transfer of granted lands in favour of the Government, the Central Government, a local authority or a bank either before or after the commencement of this Act."
24. A Bank is defined under Section 3(1)(a) of the PTCL Act as under:
3. Definitions.- (1) In this Act, unless the context otherwise requires,-
(a) "bank" means,-
(i) a co-operative society (including a co-operative bank);
(ii) the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934;
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WP No. 57108 of 2014
(iii) a banking company as defined in the Banking Regulation Act, 1949;
(iv) the State Bank of India constituted under the State Bank of India Act, 1955;
(v) a subsidiary bank as defined in the State Bank of
India (Subsidiary Banks)
Act, 1959;
(vi) a corresponding new bank constituted under
section 3 of the Banking
Companies (Acquisition and Transfer of
Undertakings) Act, 1970;
(vii) the Agricultural Refinance and Development Corporation constituted under the Agricultural Refinance Co-operation Act, 1963;
(viii) the Karnataka State Agro-Industries Corporation, a company incorporated under the Companies Act, 1956;
(ix) the Agricultural Finance Corporation Limited, a
company incorporated under
the Companies Act, 1956;
(x) any other financial institution owned or controlled
by the Government or the
Central Government and notified by the Government as a bank for the purpose of this Act.
25. A perusal of the above would indicate that a Bank would also include a Co-operative society, including a Co- operative Bank. Thus, there being no restriction on a grantee of agricultural land to avail himself of a loan from any Bank for the purpose of agricultural activities. In the event of there being a default in repayment of the said loan, the borrower cannot subsequently contend that on account of the embargo under Section 4 of the PTCL Act,
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WP No. 57108 of 2014the property cannot be brought for sale. If such a stand is accepted, then no land which has been mortgaged by a grantee belonging to a Scheduled Caste or Scheduled Tribe Community, can be brought for sale on a default of repayment of the loan. It is for that reason that an exception or an exemption is created under Section 7 of the PTCL Act, and if there is a default in the repayment of the loan, the Bank could be well within its rights to bring the said property for auction, exercising its mortgage rights, as such, this last contention of Sri. Jayakumar S. Patil, learned Senior Counsel, would also not survive for consideration and would have to be rejected.
26. In view of the above, I pass the following:
ORDER i. The writ petition is allowed, a certiorari is issued, the order dated 11.11.2014 in Revision Petition No.CO/18/CAP/2013 passed by respondent No.1 at Annexure-A is hereby quashed, the auction sale in favour of the Petitioner is confirmed.
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ii. The amount in deposit is directed to be returned to respondent No.6 by following necessary procedure.
Sd/-
JUDGE GJM List No.: 1 Sl No.: 30