IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL No. 1343 of 2012 In SPECIAL CIVIL APPLICATION No.10576 of 2012 With CIVIL APPLICATION No. 12119 of 2012 For Approval and Signature:
HONOURABLE THE CHIEF JUSTICE MR.BHASKAR BHATTACHARYA HONOURABLE MR.JUSTICE J.B.PARDIWALA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= JAYANTIBHAI NATHUBHAI JARIWALA - Appellant(s) Versus SURAT PEOPLE'S CO-OP.BANK LTD & 2 - Respondent(s) ========================================================= Appearance :
MS. KRUTI M SHAH for Appellant MR RAVINDRA SHAH for Respondents ========================================================= CORAM :
HONOURABLE THE CHIEF JUSTICE MR.BHASKAR BHATTACHARYA and HONOURABLE MR.JUSTICE J.B.PARDIWALA Date : 08/11/2012 CAV JUDGMENT (Per : HONOURABLE THE CHIEF JUSTICE MR.BHASKAR BHATTACHARYA)
1. Admit. Mr. Ravindra Shah, the learned advocate, who appears on advance copy waives service of admission on behalf of the respondents.
2. Since the parties have appeared and we have heard them fully, this appeal is disposed of finally.
3. This Letters Patent Appeal under Clause-15 of the Letters Patent is at the instance of an unsuccessful writ-petitioner and is directed against an order dated September 25, 2012 passed by a learned Single Judge of this Court in Special Civil Application No. 10576 of 2012, by which His Lordship dismissed the writ-application filed by the appellant.
4. In the writ-application, out of which the present Letters Patent Appeal arises, the appellant prayed for the following reliefs:
“[a] admit and allow this petition.
[b] issue appropriate writ, order or direction of quashing and setting aside the auction proceedings held on 20.07.2012 in pursuance of the said notice dated 01.07.2012 published in a daily news paper Divya Bhaskar on 01.07.2012, as being illegal, against the provisions of law and unconstitutional.
[c] issue appropriate writ, order or direction to the respondents to give chance to the present petitioner to participate in the auction proceedings.
[d] issue appropriate writ, order or direction to the respondents to produce all the details of the said auction held on 20.07.12 with the details of the purchaser and the amount of deposit made by him.
[e] issue appropriate writ, order or direction directing the respondents to produce the record of the earlier auction proceedings of the same property, more particularly the record of the auction proceedings of the year 2011, with the details of the upset price of the said property.
[f] PENDING ADMISSION, FINAL HEARING & DISPOSAL of this petition, direct the respondents not to dispossess the petitioner and his family the property bearing No. 9/415 situated at Wadi Faliya, Store Sheri, Surat.”
5. The following facts are not in dispute:
5.1 In the year 1987, the father of the appellant obtained a loan from the respondent no.1 Bank of an amount of Rs. 5.00 Lac for the business purpose. Six persons including the father of the appellant stood as guarantors of the said loan and all those persons had executed an affidavit & promissory note and the property bearing Ward No. 9 Nodh No. 415 admeasuring 135-45-30 sq.mts, situated at Wadi Faliya Store Sheri, Surat City was mortgaged with the respondent no.1 Bank.
5.2 The father of the appellant failed to make regular payment of the installments of the loan and, therefore, the respondent no.1 Bank filed a Lavad Suit, being Lavad Case No. 426 of 1990 before the Registrar and the court of Board of Nominees, Surat, with a prayer for recovery of the loan amount along with interest.
5.3 On April 26, 2001, the Registrar and the Board of Nominees, Surat, passed an award directing all the natural heirs of the father of the appellant to pay the amount of Rs. 6,15,610/- with interest at the rate of 15% together with cost.
5.4 On December 7, 2004, the Recovery Officer of the respondent no.1 Bank passed an order of attachment of immovable property, i.e. 9/415 as mentioned earlier. It may not be out of place to mention here that the appellant and one of his brothers, viz. Kanchanbhai Nathubhai, were given the said property by way of a Will dated February 28, 1983 by the father of the appellant which was registered before the office of the Sub-Registrar, Surat on the same date.
5.5 Subsequently, on June 30, 2012, a common notice was issued by the Sale Officer of the respondent no.1 Bank upon all the legal heirs, demanding the amount and intimating that the auction was scheduled to be held on July 20, 2012.
5.6 On July 11, 2012, the appellant sent a notice against the said sale notice alleging that the responsibility of making the payment of decretal amount was upon all the legal heirs and representatives of the deceased father of the appellant and the properties of the other heirs were situated in Ward No. 9, Nodh No. 496 and 545 were situated in Wadi Faliya.
5.7 Before the learned Single Judge, the appellant contended that the power of sale as provided under Section 159 of the Gujarat Cooperative Societies Act, 1961 [“the Act”] can be exercised only by the Registrar or any officer subordinate to him and empowered by him, and that the Registrar empowered the Gujarat State Urban Cooperative Bank Federation Ltd. to exercise the power under Section 159 of the Act and, therefore, the auction proceedings were without jurisdiction. Secondly, it was contended that the period of limitation, in view of Article 182 of the 1st Schedule to the Indian Limitation Act, 1908 being three years, the execution proceeding was barred as the same was initiated in the year 2012, whereas the decree was passed in the year 2001. Lastly, it was contended that no notice of 30 days as provided in Rule 119 of the Gujarat Cooperative Societies Rules, 1965 [“the Rules”] was given.
5.8 The learned Single Judge overruled all the aforesaid contentions advanced by the learned advocate for the appellant and pointed out that the decree obtained by the respondent no.1-Bank having attained finality and the property having been attached, there was no illegality on the part of the Bank in selling the property. The learned Single Judge was further of the view that the writ-petitioner, with mala fide intention, was trying to delay the execution of the decree.
6. Being dissatisfied, the writ-petitioner has come up with the present appeal.
7. Ms. Kruti M. Shah, the learned advocate appearing on behalf of the appellant re-argued all the aforesaid three points before us. We are not impressed by the first two submissions, i.e. the power of delegation and the question of limitation inasmuch as under the present Limitation Act, 1963 the period of limitation is of 12 years and thus, the execution proceeding was initiated within the period of limitation. Similarly, we are also not impressed by the submissions that the delegation was without jurisdiction.
8. We, however, find substance in the contention of Ms Shah that the procedure for sale by auction as provided in Rule 119 of the Rules has not been complied with. To appreciate the aforesaid question, Rule 119 of the Rules is quoted below:
“119. Proclamation before sale:
Proclamation of sale shall be published by affixing a notice in the office of the Recovery Officer and the Taluka Office at least thirty days before the date fixed for th sale and the Recovery Officer shall cause the publication of the proclamation regarding the time and place of intended sale to be made by beat of drum in the village on the day prior to a fortnight and on two consecutive day previous to the date fixed for sale and of the date of sale prior to the commencement of sale. Such proclamation shall where attachment is required before sale, be made after the attachment has been effected. Notice shall also be given to the decree-holder and the defaulter. The proclamation shall state the time and place of sale and specify as fairly and accurately as possible :
[i] the property to be sold,
[ii] any encumbrance to which the property is liable,
[iii] the amount, for the recovery of which sale is ordered, and
[iv] every other matter which the Sale Officer considers material for a purchaser to know in order to judge the nature and value of the property.”
9. On a plain reading of the aforesaid Rule, it is clear that before the sale of a property for execution of a decree, the provisions of notice as contemplated in Rule 119 of the Rules must be complied with. According to the said Rule, 30 days' notice is required to be given to the defaulter. There is no dispute that in this case, such notice was given on 30th June, 2012 and on its refusal by the appellant, the same was affixed on the building in question, whereas the sale had taken place on July 20, 2012.
10. Mr. Ravindra Shah, the learned advocate appearing on behalf of the Bank strenuously contended before us that according to Rule 119 of the Rules, all that is necessary is that the notice should be affixed at least 30 days before the date of sale in the office of the Recovery Officer and Taluka Office, but there is no requirement of notice of 30 days for the purpose of giving notice to the defaulter, and, therefore, initially, 30 days' notice having been affixed in the office of the Recovery Officer and Taluka Office, mere fact that such notice was issued on June 30, 2012 to the defaulter will not invalidate the same.
11. We are not at all impressed by such submission. It appears that proclamation of sale has to be published at least 30 days before the date fixed for sale and the same should be affixed not only in the office of the Recovery Officer and Taluka Office but the notice of the same should also be given to the decree holder and the defaulter specifying the time and place of the sale. The object of giving such notice is to give 30 days' time as a last chance to the defaulter to make the payment so that he can deposit that amount before the Sale.
12. In case before us, admittedly such notice having been issued on June 30, 2012 and the sale having taken place on July 20, 2012, the proclamation of sale was invalid and consequently, the sale is also invalid. Although Mr. Shah tried to impress upon us that in that event, the purchasers are necessary party and in their absence, the writ- application is not maintainable, we are not impressed by such submission. It appears that the purchaser deposited Rs. 6.00 Lac on 19th July, 2012 and further Rs. 3.00 Lac on 20th July, 2012. Thereafter, he has further deposited Rs. 10.00 Lac on 13th August, 2012; further Rs. 10.00 Lac on the same day i.e. on 13th August; Rs. 1.00 Lac on 17th August, 2012; Rs.15.00 Lac on 17th August and Rs.13.51 Lac on 18th August, 2012. Thus, on the date of filing of the writ-application, i.e. 30th July, 2012, no right accrued in favour of the purchaser and the position of the purchaser is that of a “purchaser during the pendency of the writ-application”. Therefore, he is bound by the decision that is passed on the writ-application. Moreover, according to Rule-122 of the Rules, the balance payment should be paid within 15 days from the date of the sale and in this case, it appears that the balance amount has been paid on August 18, 2012, whereas the sale had taken place on July 20, 2012. Therefore, on that ground also, the sale is liable to be set aside as the balance amount has not been paid within 15 days from the date of the sale and in the rule discretion is given for extension only for the payment of cost of stamp and not for the sale price.
13. On consideration of the entire materials on record, we thus find that the learned Single Judge erred in law in overlooking the aforesaid LPA/1343/2012 10/10 JUDGMENT aspect that the mandatory provision of giving proclamation notice has not been complied with and on that ground alone, the sale is liable to be quashed as the appellant has not got the opportunity of making payment within 30 days from the date of such notice.
14. In view of the above, the mandamus appeal is thus allowed. The judgment and order dated September 25, 2012 passed by the learned Single Judge in Special Civil Application No. 10576 of 2012 is hereby set aside on the aforesaid ground. However, we stipulate a condition that the appellant should deposit the entire outstanding dues of the Bank as on today within 30 days from the date of communication of the total amount of dues to the appellant by the Bank; in default, the sale will be confirmed. There shall be no order as to costs.
As the main Letters Patent Appeal is allowed, the Civil Application does not survive and the same is accordingly disposed of.
[BHASKAR BHATTACHARYA, CJ.]
[J.B.PARDIWALA, J.]
pirzada/-