IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF JULY 2019 BEFORE THE HON’BLE MR. JUSTICE B. VEERAPPA WRIT PETITION NO.15339/2010 (GM-RES) BETWEEN:
SMT. ASHA SHENOY W/O BALAKRISHNA SHENOY AGED ABOUT 45 YEARS RESIDING AT DWARAKA ANANTHANAGARA II STAGE, MANIPAL UDUPI TALUK UDUPI DISTRICT … PETITIONER (BY MS. ANNU BHARDWAJ, ADV. FOR SRI. HARIKRISHNA S. HOLLA, ADV.) AND:
1. ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES AND THE RECOVERY OFFICER D.K.DISTRICT, CENTRAL CO-OPERATIVE BANK LTD., MANGALURU – 575 003 2. THE SALE OFFICER KARKALA ZONE D.K.DISTRICT CENTRAL CO-OPERATIVE BANK LIMITED, MANGALURU – 575 003 3. THE HEBRI VYAVASAYA SEVA SAHAKARI BANK, HEBRI, KARKALA TALUK UDUPI DISTRICT 4. MR. SANNAYYA SHETTY S/O HIRIYANNA SHETTY AGED ABOUT 64 YEARS NAVEEN NIVAS, CHARA VILLAGE KARKALA TALUK, UDUPI DISTRICT 5. MR. BALAKRISHNA HEGDE S/O CHANDRASHEKAR HEGDE AGED ABOUT 51 YEARS MUKTHESHWARA MANE HOSUR KARJE, UDUPI TALUK Amended as per Court Order dated 22.08.2012 ... RESPONDENTS (BY SRI. Y. D. HARSHA, AGA FOR R-1;
SRI. RAMESH CHANDRA, ADV. FOR R-2 & R-3; SRI. K. PRASANNA SHETTY, ADV. FOR R-4; SRI. K. PRASAD HEGDE, ADV. FOR R-5.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE PAPER PUBLICATION DATED 26.04.2010 WHEREIN THE BRINGING OF THE PETITION SCHEDULE PROPERTY FOR AUCTION ON 06.05.2010 VIDE ANNEXURE-A.
THIS WRIT PETITION COMING ON FOR HEARING THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The petitioner, alleged agreement holder from the respondent No.4, is before this court for a writ of certiorari to quash the Notice issued through Paper Publication dated 26.04.2010 to bring the petition schedule premises for auction on 06.05.2010 as per Annexure-A.
2. It is the case of the petitioner that respondent No.4 who is the owner of the land measuring 4.5 cents and 29 cents in Survey No.72/1AP5 and 72/2B of Hebri village and 3.5 cents in Sy.No.93-5A1P2 of Chara village of Karkala Taluk in Udupi district, entered into an agreement to sell the petition schedule property to the petitioner on 25.03.2003 for a total consideration of Rs.7,25,000/- due to his need to pay the dues towards respondent No.3 Bank and to protect the property of the respondent No.4 as well as his image in the society. It is further stated that the respondent No.3-Bank had extended loan of Rs.9,50,000/- on 26.04.2002 to respondent No.4. The total outstanding due to the Bank by the 4th respondent was Rs.2,03,252/-. However, there was no lien on the property during the period of agreement by the petitioner, as could be seen from the encumbrance certificate dated 09.09.2003. Thereafter, the petitioner has given a Paper Publication expressing her intention of buying the 4th respondent’s property. Then, the 3rd respondent Bank has issued legal notice to the petitioner’s counsel stating that the 4th respondent has already created charge over the property. On the very same date, the 3rd respondent had also issued notice dated 28.10.2003 to the 4th respondent regarding Paper Publication made by the petitioner.
3. It is the further case of the petitioner that on the date of agreement, the petitioner had made an advance payment of Rs.2,25,000/- and was required to pay the balance amount of Rs.5 lakhs directly to the respondent No.3 on receipt of the letter of confirmation from them through respondent No.4 confirming that they are holding the original title deeds pertaining to the said properties and that they are ready and willing to hand over the same to the petitioner free of their lien on the properties. The responsibility of bringing down liability of Rs.5,00,000/- and getting a letter from 4th respondent within six weeks from the date of agreement. Since, the 4th respondent failed to fulfil the commitment in terms of the agreement, the petitioner got issued legal notice dated 28.10.2003 and filed OS No.112/2006 on the file of the Civil Judge (Sr.Dvn.) Karkala against respondent No.4 to enforce the agreement, and obtained an exparte Temporary Injunction with liberty to sell or alienate petition schedule property. But the petitioner has not made respondent No.3 as party to the OS proceedings. Further, the said Temporary Injunction order was not challenged. The petitioner did not issue legal notice to respondent No.3. But, the respondent No.4 got issued legal notice dated 26.03.2006, accepting the agreement with certain terms.
4. Thereafter, to the utter shock of the petitioner, notice through newspaper publication was made by respondent Nos.2 & 3 on 20.10.2007 in Udayavani kannada daily notifying the auction sale of the properties on 28.12.2007 to recover the huge amount in connivance with the respondent No.4, to defraud the petitioner and to defeat the rights of the petitioner, has published auction sale of the property in the newspaper. He has further contended that these respondents kept the facts of the case in dark and filed suit in the Court of Assistant Registrar of Co-operative Societies, Kundapura in No.1427/2006-07 and 1428/2006-07 on 10.03.2007, which came to be decreed 05.06.2007 and 28.05.2007 respectively. On the basis of the said decree, Civil Execution Petition Nos.148/2006-07 and 453/2006-07 are initiated by all the respondents in collusion with each other. Therefore, the same are liable to be rejected. After contest, the suit came to be decreed in part directing 4th respondent to refund the advance amount with 8% interest. Against which a petition has filed in RA No.30/2017 before the Senior Civil Judge, Udupi and the learned Principal Civil Judge has ordered not to alienate the property. In the mean while, the respondent No.3 published the auction notice and auction was fixed on 06.05.2010. Hence, the petitioner is before this court for the reliefs sought for.
5. Heard the learned counsel for the parties to the lis. Perused the records carefully.
6. Ms. Annu Bharadwaj, learned counsel for the petitioner vehemently contended that the impugned order at Annexure-A issued by the respondent No.3 issuing notice through Paper Publication dated 26.04.2010 and to auction the property on 06.05.2010 is erroneous and contrary to the materials on record and liable to be quashed. She has further contended that the petitioner entered into an agreement on 25.03.2003 for a total sale consideration of Rs.7,25,000/- with the 4th respondent and the trial Court has granted injunction restraining the defendant - Bank to not sell or alienate the property as the proposed auction is erroneous and cannot be sustained. She would further contended that though the 4th respondent borrowed loan from the 3rd respondent Bank, a sum of Rs.9,50,000/- due to the Bank was only to the extent of Rs.2,03,252/- and the petitioner has been depositing in the Society. Therefore, the auction cannot be permitted to proceed, otherwise, the very purpose for which the petitioner has filed appeal before the Principal Senior Civil Judge in RA No.30/2017 will become infructuous. She would further contend that this court granted interim order as prayed for and it is still subsisting and therefore, she sought to allow the Writ Petition.
7. Per contra, Sri K. Prasad Hegde, learned counsel for 5th respondent who is the purchaser in the auction sale conducted by the 3rd respondent Bank, submits that the very Writ Petition filed by the petitioner against the public auction made by the 3rd respondent Bank on the basis of the award passed is not maintainable. The suit filed by the petitioner to enforce the agreement came to be rejected.
The trial Court only directed to 4th respondent to refund the advance amount with interest. Therefore, he sought to dismiss the Writ Petition.
8. Sri Rameshchandra, learned counsel for respondent Nos.2 & 3 submits that even before the petitioner entered into an agreement with the 4th respondent Bank, the Bank has already borrowed the loan from the Bank in the year 2002 and in fact, in the agreement by the petitioner as far as Annexure-B it is specifically stated about the loan with the 4th respondent. In all fairness, the petitioner would have included the 3rd respondent bank and the 4th respondent borrowed the loan from the 3rd respondent bank, lien always in favour of the Bank since the decree directing the 4th respondent, is not challenged, therefore, he submits that the petitioner has no locus standi to challenge the auction notice and sought for dismissal of the Writ Petition in view of Section 54 of Transfer of Property Act.
9. Shri. K. Prasanna Shetty Learned counsel for the respondent No.4, contended that 4th respondent who borrowed loan from the 3rd respondent bank had entered into agreement with the petitioner, though the 4th respondent is ready and willing to return the advance amount with interest to petitioner as per decree and the same is not challenged by the 4th respondent. But, the petitioner has not come forward to rescue at same. Therefore, he sought for dismissal of the Writ Petition, 10. Having heard the learned counsel for the parties, it is the specific case of the petitioner that he entered into an agreement dated 25.03.2003 with the 4th respondent for sale consideration of Rs.7,25,000/-. The loan borrowed by 4th respondent has been virtually settled by the petitioner on behalf of the 4th respondent and as on the date of the auction sale, the due was only Rs.2,03,252/-, but the 3rd Bank specifically contended that in the very agreement of sale relied upon by the petitioner which is an un-registered agreement. At paragraph 3 of the agreement dated 25.03.2003, it is mentioned as under:
“3. The Purchaser has made another part payment by cheque for Rs.1,00,000/- (Rupees One Lakh only) and the “SELLOR”
hereby acknowledges the receipt of the same as part of the consideration and the balance payment of Rs.5,00,000/- to be made to the “SELLOR” within 6 months from this date by paying directly to the loan account of the “SELLOR” with Vyavasaya Seva Sahakari Bank Ltd., Hebri for which the “SELLOR” shall get a letter from Vyavasaya Seva Sahakari Bank Ltd., Hebri in favour of “THE PURCHASER” stating that they have no objection to sell the property and the liability with them from the “SELLOR” is only Rs.5,00,000/- (Rupees Five lakhs).”
11. It is also clear from the record that the 1st respondent has passed an award on the basis of the application filed by the 3rd respondent awarding a sum of Rs.4,55,603/- and Rs.2,03,252/- with interest. Admittedly, the said award passed by the first respondent at the instance of the respondent No.3 was not challenged by the 4th petitioner or the present petitioner. The said award has reached finality.
12. It is also not in dispute that knowing fully well, the 4th respondent has already borrowed loan from the 3rd respondent Bank and the property in question was pledged in favour of the 3rd respondent. With all fairness, the petitioner should have impleaded the respondent No.3 Bank in the suit. Admittedly, it is not in dispute that the 3rd respondent Bank is not a party to the suit and that the 4th respondent had borrowed loan from the 3rd respondent and pledged the property in question in the year 2002 itself, even before entering into an agreement of sale, and as on the date of the auction, the amount due was in a sum of Rs.1,89,849/- along with interest and other expenses. The 5th respondent who is the auction purchaser, offered to purchase the property for a sum of Rs.70,25,000/- on 06.05.2010.
13. Admittedly, the 3rd respondent Bank has lien in respect of the property in question as the 4th respondent has borrowed loan from the first respondent in the year 2002, knowing fully well the transaction between 4th respondent and 3rd respondent, the petitioner ought not to have entered into an agreement. In the agreement, a specific clause is stated about payment tobe made to the Bank as stated supra, since the award passed by the Assistant Registrar of Societies at the instance of 3rd respondent has reached finality and during the pendency of the suit OS No.112/2006 the injunction sought by the plaintiff was allowed in part only directing the defendant i.e., the present respondent No,4 with liberty to the Bank to sell the property or alienate in favour of the 3rd respondent Bank. The said order has reached finality as the award passed by the first respondent has not challenged. Therefore, the 3rd respondent Bank has brought the property in auction to recover the dues in accordance with law.
14. The petitioner is the subsequent agreement holder. Lien always lies in favour of the 3rd respondent Bank. Therefore, the petitioner cannot maintain to present Writ Petition. The impugned auction notice issued by the first respondent is in accordance with law. Petitioner is not entitled for any relief under Articles 226 and 227 of the Constitution of India. Accordingly, the Writ Petition is dismissed.
15. It is needless to observe, that it is always open for the petitioner to pursue her RA No.30/2017 pending between the parties and she can work out her remedy in accordance with law.
Ordered accordingly.
Sd/- JUDGE PL*