IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF AUGUST, 2019 BEFORE THE HON’BLE MR. JUSTICE ARAVIND KUMAR W.P.NO.10248/2019 & W.P.Nos.10929-931/2019 (KLR-RES) BETWEEN:
1. SRI. PROMOD @ PRASHANTH S/O LATE BABU SHETTY AGED ABOUT 44 YEARS.
2. SMT. LATHAMANI D/O LATE BABU SHETTY AGED ABOUT 31 YEARS.
3. SRI. PRATHAM S/O THARANATHA AGED ABOUT 12 YEARS.
4. SMT. SINCHANA D/O THARANATHA AGED ABOUT 10 YEARS.
(SINCE NO.3 & 4 ARE MINORS THEY ARE REPRESENTED BY THEIR MOTHER SMT. PRAMILA) ALL ARE R/AT SURIBAILU HOUSE BOLANTHUR VILLAGE & POST BANTWAL TLAUK D.K. DISTRICT – 574 222.
(BY SRI. RAJASHEKAR S, ADVOCATE) AND:
1. DEPUTY COMMISSIONER ... PETITIONERS DAKSHINA KANNADA DISTRICT MANGALORE – 575 001.
2. SRI. THARANATHA S/O LATE BABU SHETTY AGED ABOUT 44 YEARS SURIBAILU HOUSE BOLANTHUR VILLAGE AND POST BANTWAL TALUK D.K. DISTRICT – 574 222.
3. SMT. NALINA @ NALINAKSHI W/O LATE BABU SHETTY AGED ABOUT 60 YEARS SURIBAILU HOUSE BOLANTHUR VILLAGE AND POST, BANTWAL TALUK D.K. DISTRICT – 574 222.
4. SRI. DINESH SHETTY S/O LATE BABU SHETTY AGED ABOUT 46 YEARS SURIBAILU HOUSE BOLANTHUR VILLAGE AND POST, BANTWAL TALUK D.K. DISTRICT – 574 222.
5. SRI. D. RAMA RAO AGED ABOUT 77 YEARS PADMA NILAYA, KALLADKA BANTWAL TALUK D.K. DISTRICT – 574 222.
6. SRI. RAJESH C/O D. RAMA RAO AGED ABOUT 66 YEARS PADMA NILAYA, KALLADKA BANTWAL TALUK D.K. DISTRICT – 574 222.
7. SMT. REKHA N C/O D. RAMA RAO AGED ABOUT 45 YEARS PADMA NILAYA, KALLADKA BANTWAL TALUK D.K. DISTRICT – 574 222.
8. SRI. RADHAKRISHNA C/O D. RAMA RAO AGED ABOUT 47 YEARS PADMA NILAYA, KALLADKA BANTWAL TALUK D.K. DISTRICT – 574 222.
9. SRI. RAM GANESH PRABHU S/O GOPAL PRABHU BANTWALA MOODA VILLAGE BANTWAL TALUK D.K. DISTRICT – 574 211.
10. THE TAHASILDAR BANTWAL TALUK D.K. DISTRICT – 574 211.
11. SAMAJA SEVA SAHAKARI BANK(N) BANTWAL(NO.7149) REPRESENTED BY CHIEF MANAGER, PREETHI BUILDING VITTAL ROAD, KALLADKA BANTWAL TALUK D.K. DISTRICT – 574 222.
... RESPONDENTS (BY SRI. Y.D. HARSHA, AGA FOR R-1 & R-10; R-2, R-3, R-4 SERVED & UNREPRESENTED; SRI. KRISHANAMURTHY D, ADVOCATE FOR C/R-5 TO R-8;
SRI. VENUGOPAL M.S, ADVOCATE FOR R-9; SRI. GIRIDHAR M.S, ADVOATE FOR R-11) THESE W.Ps. ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED:12.02.2019 PASSED BY THE R-1 IN TAX/CR/158/2017/D3 VIDE ANNEXURE-A AND CONSEQUENTLY SET ASIDE THE SALE CONDUCTED BY THE TAHSILDAR ON 25.10.2017, I.R.126/17-18, I.R.127/17-18, I.R.128/17-18 AND I.R.129/17-18 VIDE ANNEXURE-T TO T3.
THESE PETITIONS COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Respondent Nos. 5 to 8 have filed complaint under Section 12 of the Consumer Protection Act, 1986 against M/s Nalina Finance Corporation represented by managing partners in complaint No.197/2011, 198/2011, 199/2011 and 201/2011 which came to be allowed by directing the respondents thereunder to pay amounts specified in the orders with interest @ 14 % p.a. from January 2010 till date of payment. In order to enjoy the fruits of the decree, execution petition came to be filed under Section 27 of the Consumer Protection Act, 1986 for non payment of amount. Pursuant to order, simultaneously execution petition under Section 25 of the Consumer Protection Act came to be filed in E.P.No.69/2016 to 72/2016 and in said execution proceedings property bearing Sy.Nos. 13/2, 88/26, 90/3A, 88/3, 90/2, 104/2, 14/1A, 89/5BP2 and 895A situated at Bolanthuru village, Bantwala taluk came to be attached and subsequently, said property was brought for sale by conducting public auction on 25.10.2017 whereunder ninth respondent herein on being successful bidder purchased the said property measuring 9.37 acres.
2. Being aggrieved by conducting of auction on 25.10.2017 by tenth respondent-Tahsildar, Bantwal petitioners filed petition under Section 176(1)(a) of Karnataka Land Revenue Act before first respondent, who by order dated 12.02.2019 dismissed the same and upheld the auction sale conducted by tenth respondent with further direction to proceed as per law.
3. During pendency of the present proceedings auction was conducted on 25.10.2017 for which objections had been raised by the petitioners, has also been affirmed by first respondent on 02.05.2019- Annexure-A1. In fact by communication dated 31.05.2019-Form No.4 has been forwarded by tenth respondent to jurisdictional Sub-Registrar vide Annexure-A2 and A3 for effecting necessary entries in the registration book as the sale effected in favour of the respondent No.9 and same came to be confirmed by first respondent on 02.05.2019. Hence, petitioners are before this Court for quashing of the said order/ proceedings.
4. It is the contention of Sri. S. Rajashekar, learned counsel appearing for petitioners that petitioner was not a partner of the erstwhile firm and property in question having been allotted to petitioner’s share in the decree passed in O.S.No.270/2013 same could not have been subject matter of the auction for charge could have been created over the said property, which is the property belonging to the petitioner exclusively.
4(i) He would also elaborate his submission by contending that only after coming to know about the proceedings pending before Consumer Court and other connected matters, petitioners took steps for setting aside the sale.
4(ii) He would also contend that as on date of decree which came to be passed in O.S.No.270/2013 i.e., on 11.10.2015 there was no order of attachment passed in respect of property in question and as such any proceedings taken pursuant to it is liable to be quashed. As such he has prayed for allowing these petitions by setting aside the order.
5. Having heard the learned Advocates appearing for parties and on perusal of records and bestowing my careful consideration to the rival contentions raised at the bar it requires to be noticed at the first instance that petitioner Nos. 1 and 2 are sons of late Sri. Babu Shetty and petitioner Nos. 3 and 4 are son and daughter of Sri. Taranath. Sri.Babu Shetty as well as Sri. Taranath were partners of M/s Nalina Finance Corporation, a partnership firm as evident from deed of partnership dated 29.03.1993 vide Annexure-R.
6. Respondent Nos. 5 to 8 had filed complaints before the District Consumer Forum in Complaints Nos.197 to 201/2011 alleging there was deficiency in services and seeking recovery of amounts due to them from the said finance Corporation. Said complaints came to be allowed and financial Corporation represented by its partners were directed to pay a sum of Rs.4,25,000/- Rs.3,50,000/-, Rs.3,75,000/- and Rs.3,00,000/- in favour of respective complainants along with interest @ 14% p.a. from January 2010 till date of payment. Order passed against Firm as well as partners of the Firm as could be seen from order of the District Forum dated 20.09.2011-Annexure-C is joint and several. As on date of the order which came to be passed by District Consumer Form, the immovable property bearing Sy.Nos.13/2, 88/26, 90/3A, 88/3, 90/2, 104/2, 14/1A, 89/5BP2 and 895A as noticed hereinabove was standing in the name of Late Sri.Babu Shetty and there was no proceedings initiated by any members of the family.
7. Be that as it may. There is no appeal against the order passed by District consumer Forum. In the meanwhile the beneficiaries of the order of Consumer Forum namely, respondent Nos.5 to 8 herein initiated execution proceedings and in the said execution proceedings they have sought for attachment of immovable property which was ordered on 14.09.2016. In the meanwhile, father of petitioner Nos.3 and 4 is said to have filed suit in O.S.No.270/2013 in respect of the immovable property in question claiming said property as a joint family property and is said to have been granted share by virtue of compromise petition being filed and accordingly, decree came to be drawn on 11.05.2015- Annexure-B. However, respondent No.10 proceeded to auction the property in question and conducted public auction on 25.10.2017, in which proceedings respondent No.9 herein became successful bidder and as such he purchased the property. When the matter was pending before first respondent for confirmation of sale, petitioner herein filed an application/petition questioning the legality and validity of the auction sale conducted by respondent No.10 by raising several grounds namely the grounds similar to the one urged in the present writ petitions. Learned Deputy Commissioner by impugned order dated 12.02.2019-Annexure-A has rejected said objections on the ground that there are no sufficient grounds to set aside the auction and has upheld the same by concluding that entire property was standing in the name of late Sri. Babu Shetty and the decree of compromise petition obtained in O.S.No.270/2013 is collusive decree on account of same having come into effect subsequent to order passed by the District consumer Forum on 20.09.2011 vide Annexure-C. For arriving at this conclusion, the theory set up by writ petitioner herein had also received attention and following findings came to be recorded:
“Altogether a make believe novel story is set up by the first petitioner that item No.1 and 2 of the petition schedule property are allotted jointly to 1st petitioner and 3rd respondent in “E” schedule of the compromise decree in O.S.270/2013 even though the records RTC’s speak otherwise and 2nd petitioner and 2nd respondent and one Hariprasad were allotted item No.3 to 6 of the petition schedule lands even though the RTC speaks otherwise and 1st respondent was allotted item No.7 to 9 of the petition schedule lands in compromise decree passed in O.S.No.270/2013 and the said allotment in favour of respondent No.1 has not been made in his individual capacity but allotment is made on behalf of all the children of respondent No.1 as respondent No.1 is the head of his branch consisting of minor petitioner No.3 and 4 and respondent No.1 and 1st petitioner, Pramod alias Prashanth, S/o Shri Babu shetty and 3rd respondent Shri Dinesh S/o Babu Shetty filed suit for partition and separate possession at O.S.No.497/2017 and the 2nd petitioner by name Smt. Lathamani filed suit for partition and separate possession at O.S.506/2017 and minor petitioner, Pratham S/o Tharanath Shetty and Miss. Sinchana D/o Tharanath Shetty filed suit for partition and separate possession at O.S.No.506/2017 in the Court of Principal Civil Judge and JMFC, Bantwal and the plaint schedule properties are the ancestral properties of the families of respondent No.1 and minor petitioner No. 3 and 4 and originally the said items of lands along with other lands had been allotted to the grandfather of minor petitioner 3 and 4 and the father of 1st respondent by name Shri. Babu Shetty and minor petitioners are having right over item No.7 to 9 of the petition schedule and minor petitioner 3, 4 and respondent No.1 are having 1/3 share each and accordingly minor petitioner 3 and 4 have filed suit for partition schedule land at O.S.No.505/2017. if it was really so, the 1st respondent, Shri Tharanath in O.S.270/2013 could not have framed the said partition suit and obtained compromise decree. The partners of Nalina Finance have joined hands and have engineered to set up all together a different case and thereby create some more rights amongst the parties by using the minor children of Tharanath petitioner No.3 and 4 in this petition as a special tool so that the respondent No.4 to 7 are obstructed from reapin the fruits of the decree and oust the 8th respondent auction purchaser of the schedule land. If there was any error or omission in passing of the compromise decree it could have been got amended and obtained amended decree. But the plaintiff did not take recourse to such remedial measure instead he has set up a different stand all together deviating the compromise decree in O.S.No.270/2013 itself which is rather strange. The fact that O.S.No.270/2013 was filed on 26-08- 2013 and the compromise decree was obtained on 11-10-2013 and subsequent to the compromise decree the 1st respondent/Tharanath/ the plaintiff in O.S.No.270/2013 obtained loans of Rs. 20.00 Lakh in Samaja Seva Sahakari Bank Niyamitha, Bantwal, Rs. 23,35,000/- on 17-12- 2014, from State Bank of Mysore, B.C. Road and Rs.2.00 Lakhs 3 times totaling Rs. 6.00 Lakhs from Vijaya Bank, Kalladka on 22-03-2014 and Rs.
20.00 Lakhs from Thumbe Corporation and all those above said borrowings were subsequent to the consumer forum decree dated 20-09-2011 and the intention behind such huge borrowing need no emphasis and the same was aimed at to defeat the claim of respondent No. 4 to 7 and respondent No.8 herein/auction purchase. The entire endeavour of petitioners and other related parties to this petition i.e,. partners of Nalina Finance is aimed at obstruct and deprive respondent No.4 to 7 and auction purchaser respondent No.8 at any cost and the same is crystal clear to the naked eye”.
8. Above discussion made under the impugned order by first respondent would clearly go to show that compromise decree relied by petitioner was held to be a collusive decree. Apart from the above finding of fact, yet another aspect which cannot go unnoticed by this Court is, when an applicant seeks for setting aside the auction sale, such applicant has to comply the statutory requirement of conditions prescribed under Section 176 of the Karnataka Land Revenue Act namely, the application should be filed within 90 days setting out material irregularity or mistake or fraud and such application should be accompanied by the amount of arrears specified in the proclamation of sale, cost of sale, for payment to the purchaser and sum equivalent to 5 percentum of the purchase money as required under Section 176(1)(a)and (b) of the Act which is parameter with Order XXI Rule 12 of CPC.
9. In the instant case, undisputedly petitioners have not complied with statutory requirement or mandate of Section 176(1) (a) and (b) of the Act and on this ground itself application was liable to be rejected and as rightly contended by the learned counsel appearing for respondent No.9 (successful bidder). Even other wise, Deputy Commissioner as noticed hereinabove has examined the claim on merits and found that contention raised by the petitioner is bereft of truth. Apart from all these aspects, even if the decree is obtained by petitioners herein (which is not so factually, inasmuch as the suit was filed by the father of the petitioner Nos. 3 and 4 representing his branch) and who is now arrayed as respondent No.2 in the present proceedings and has not contested the matter would also be a pointer to the fact that decree obtained in O.S.No.270/2013 is collusive decree to stave off the creditors.
10. It requires to be further noticed that pursuant to auction sale conducted on 25.10.2017 same has been confirmed on 02.05.2019 (Annexure-A1) and communication has also been forward by respondent No.10 to the jurisdictional Sub-Registrar to effect necessary entries in the Registration Book and possession of the property has also been delivered to the successful bidder namely, respondent No.9 by respondent No.10. In other words, order which came to be passed by District Consumer Forum has been implemented by executing the same and taking the said order to its logical end.
11. For the myriad reasons aforestated, this Court is of the considered view that contentions raised by Sri. Rajashearkar, learned counsel appearing for petitioners cannot be accepted and it stands rejected. Consequently, writ petitions stand dismissed.
SD/- JUDGE RU