The Dharwar Dist Industrial Co-op. Bank Ltd. vs B.B. Lakshmeswar and Others

The Dharwar District Industrial Co-operative Bank Ltd, represented by its Chairman D.K. Puranthar has filed this writ petition under Art. 226, (1)(b) & (c) of the Constitution to quash the order dt. 25-3-77 made in appeal No.APL EXN 162 76-77 passed by the second respondent, the Deputy Registrar of Co-operative Societies, Dharwar setting aside the order of confirmation of sale dt. 10-1-77 made by the third respondent, the Asst Registrar, of Co-operative Societies, Dharwar confirming the sale of the land in Block No. 493 of Navalur village measuring 6 acres 23 guntas belonging to the first respondent B.B. Laxmeshwar.

The following are the few relevant facts necessary for the disposal of this writ petition.

The first respondent borrowed some money from the petitioner Bank against the mortgage security of his land measuring 6 acres 23 guntas in Block No. 493 of Navalur village. Since the first respondent failed to repay the loan amount the petitioner Bank initiated proceedings to recover the loan amount and brought the mortgaged property to sale and the property was sold in auction on 6-10-76. The first respondent filed an application for setting aside the sale. The third respondent who heard the application for setting aside the sale filed by the first respondent, rejected the application and confirmed the sale as per his order dt. 10-1-77. The first respondent preferred an appeal to the second respondent against the order of dismissal of his application for setting aside the sale by the third respondent. The second respondent allowed the appeal and set aside the order of sale as per the order dt. 25-3-77 which is the subject matter of this writ petition.

Sri K. Chandrashekar, the learned Advocate appearing for the petitioner advanced two contentions. They are:

(1) The impugned order passed by the second respondent dt. 25-3-77 at Ext.B is an order made without jurisdiction, since no appeal is provided against the order of the Asst Registrar of Co-operative Societies to the Deputy Registrar under the provisions of the Karnataka Co-operative Societies Act, 1959;

(2) That the impugned order dt. 25-3-77 Ext.B made by the second respondent is perverse and it is in violation of provision of the Rule 38(5) of the Karnataka Co-operative Societies Rules, 1960.

I shall proceed to consider the two contentions in the order in which they were formulated at the time of the argument.

Sub-sec(1) of Sec. 101 of the Karnataka Co-operative Societies Act, 1959 (shortly called the Act) provides for the mode of execution of the order, decision or award made under the provisions of the Act.

Sub-sec(2) provides that any question relating to the execution, discharge or satisfaction of an order, decision or award made under the provisions of the Act or relating to the confirmation or setting aside of a sale held in execution of such an order, decision or award or relating to any claim, or objection to an attachment of any property made under Sec. 103 of the Act or in the execution shall be determined by the Registrar or any other person subordinate to him empowered by the Registrar before whom such question arises.

Chapter XIII of the Act provides for appeals, revision and review. Sec. 105 deals with appeals to the Tribunal and S. 105A deals with appeals relating to admission of members of the Societies.

Sec. 106(1)(i) provides for an appeal against an order made by the Registrar under Section 101.

Sub-sec(2) of Sec. 106 which is relevant for our purpose reads thus:

"An appeal against any act, decision or order under sub-sec(1) shall be made within 60 days from the date of the act, decision or order- (a) If the act, decision or order was made by the Registrar to the State Government;

(b) If the act, decision or order was made by any other officer to that officer''s immediate superior officer."

In the instant case, the order confirming the sale, which is at Ext.A, was passed by the third respondent, the Asst Registrar of Co-operative Societies under sub-sec(2) of Sec. 101 of the Act.

An appeal is provided against that order under Cl(i) of sub-sec(1) of Sec. 106. The first respondent preferred the appeal against that order before the second respondent who is undoubtedly the immediate superior officer of the third respondent and as such he was the competent officer to hear the appeal as provided under Sec. 106(2)(b). That being the position, I do not see any force in the first contention that the impugned order was made by the second respondent without jurisdiction or authority.

The second contention urged before me is that the impugned order is perverse and made in contravention of Rule 38(5) of the Karnataka Co-operative Societies Rules, 1960 (shortly called the Rules).

Rule 38(5) reads thus:

"(A) At any time within 30 days from the date of the sale of the immoveable property a decree-holder or any person entitled to share in the rateable distribution of the assets or whose interests are affected by the sale, may apply to the Recovery Officer to set aside the sale on the ground of a material irregularity or mistake or fraud in publishing or conducting it:Provided that no sale shall be set aside on the ground of irregularity or mistake or fraud unless the Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of such irregularity, mistake or fraud;

(b) If the application be allowed, the said Recovery Officer shall set aside the sale and may direct a fresh one."

It is seen from the impugned order that the main grounds on which the sale was set aside were that the sale notice was not properly served, that certain payments made by the judgment-debtor have not been taken into account and the property was brought to sale for the full decree amount without giving deduction to the payments made by the judgment-debtor and the property which was brought to safe was vested in the Govt under Sec. 44 of the Land Reforms Act, 1961 free from all encumbrances long before the sale was held. The correctness of any of the above grounds taken into consideration by the second respondent for setting aside the sale has not been disputed before me. In that view of the matter it cannot be said that the impugned order setting aside the sale was made in contravention of R. 38(5) of the Rules. With these, the second contention also fails.

The petitioner, in my view, has failed to point out that the impugned order is one made without jurisdiction and in violation of Rule 38(5) of the Rules. I do not find any ground to hold that this case falls under Art. 226(1)(b) and (c) of the Constitution and in my opinion, the petitioner has not sustained any injury of a substantial nature and the second respondent has not committed any illegality resulting in substantial failure of justice while making the impugned order.

For the reasons aforesaid, I find the petitioner is not entitled to the relief sought for in this writ petition. Rule is discharged. There is no order as to costs.