IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF MARCH, 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA WRIT PETITION Nos.50676/2018 & 12192/2019 (GM-CPC) BETWEEN SRI S T PURUSHOTTHAM AGED ABOUT 41 YEARS, S/O THIMMAYYA PROP: VAJRA ASSOCIATES THIRTHA RAMESHWARA COMPLEX OPPOSITE RATHNA ARKHED KUVEMPU ROAD, SHIVAMOGGA PIN-577201. ... PETITIONER (BY SRI H MALATESH, ADV.) AND 1. M/S MARGADHARSHI CHITS. (K) PVT. LTD., 1ST FLOOR, K.S.V. COMPLEX, NEHARU ROAD, SHIVAMOGGA, REPRESENTED BY ITS FOREMEN, B M RAVI PIN-577201.
2. MR. KISHORE A N S/O NAGAPPA GOWDA AGED ABOUT 41 YEARS, PROP:- MANJUNATHA TRANSPORT, SRI ASHRAYA BEHIND VEENA SHARADHA SCHOOL, SHARAVATHI NAGAR, SHIVAMOGGA, PIN-577201.
3. MR. BAANU PRASAD S/O A ANAND PROP: SMILE CABLE NETWORK OPERATOR, # 86/8, 1ST MAIN 1ST CROSS NEAR CHAMUNDESHWARI TEMPLE, MILAGHATTA, SHIVAMOGGA PIN-577101.
4. MR DEVENDRAGIRI S/O MAHADEV BHARATHI PROP: SHANTHI WOOD INDUSTRIES, BABAHALLI, BADRAVATHI TALUK, SHIVAMOGGA DIST.
PIN-577210 5. MR SUBRAMANYA S/O DASAPPA M N PROP: FARE PRICE SHOP OPP: PARVATHI NURSING HOME HANUMANTHA NAGARA SAVALANGA ROAD, SHIVAMOGGA-577201. ... RESPONDENTS THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DATED 02.11.2018 PASSED BY THE PRL. CIVIL JUDGE (SR.DVN) AND CJM, SHIVAMOGGA IN EX.CASE NO.224/2010, ON I.A.NO.9 AND 10 MARKED AS ANNEXURE-C.
THESE WRIT PETITIONS COMING ON FOR ‘PRELIMINARY HEARING’ THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The present writ petitions are filed by the judgment debtor No.1 against the order dated 02.11.2018 on I.A.Nos.9 and 10 in Execution No.244/2010 on the file of the Principal Civil Judge (Sr.Dvn) and CJM, Shivamogga rejecting the application filed by the judgment debtor No.1 under Sections 33 and 34 of the Karnataka Stamp Act, 1957 (hereinafter referred to as ‘the Act’ for short) with cost of Rs.500/- each.
2. It is the case of the petitioner that the Registrar of Co-operative Societies by order dated 28.09.2010 passed ex- parte award and issued certificate for recovery of a sum of Rs.5,13,065/- against the petitioner. The respondent No.1 filed Execution No.244/2010 claiming the chit amount before the Principal Civil Judge and CJM, Shivamogga. In the said execution petition, the present petitioner-judgment debtor No.1 filed two applications under Order 13 Rule 10 of CPC to summon the entire original file in Dispute No.14/2010-11 and I.A.No.10 under Sections 33 and 34 of the Act to impound the award/certificate dated 28.09.2010 produced by decree holder by directing judgment debtor No.1 to pay Rs.3,61,951/- as stamp duty and penalty on the award contending that based on the award passed by the Registrar on 28.09.2010, decree holder filed execution petition seeking to recover Rs.5,27,318/- along with 24% of interest on it which amounts to Rs.210.93 in all Rs.5,48,411/-. The award is an instrument under the Act and as such the decree holder has to pay the proper stamp duty under Article 11 of the Act. Thus, judgment debtor No.1 prays to allow the application. The said application was resisted by the decree holder. The trial Court considering the applications and the objections, by impugned order dated 02.11.2018, rejected the applications filed by judgment debtor No.1. Hence, the present petitions are filed.
3. Sri.H.Malatesh, learned counsel for the petitioner contended that the impugned order passed by the trial Court is contrary to the material on record. He further submit that no transaction has been taken place as mentioned in the award and there is no registration of the chit has been taken place before the statutory authority. Therefore, learned Judge ought to have allowed the application. He would further contended that the award is an instrument, in order to execute the same, the decree holder has to pay the proper Stamp Duty as per Section 11 of the Karnataka Stamp Act. He would further contended that the decree holder has to pay the stamp duty on the instrument/certificate as per Section 33 of the Act. The same has not been considered by the trial Court. He would further contended that as per Ex.P1- Annexure-E, the agreement dated 21.08.2008, the decree holder has to pay stamp duty as per article 5(1)(e) of the Act. Therefore, he sought to allow the writ petitions.
4. Having heard the learned counsel for the petitioner, it is not in dispute that respondent No.1 raised dispute in D.R.C.S./Chit No.14/2010-11 before the Deputy Registrar of Co-operative Societies and Chits, Shivamogga.
After hearing both the parties, the application filed by respondent No.1 under Section 64(1) for recovery of Rs.5,13,065/- against the present the petitioner came to be decreed on 28.09.2010. The said order passed by the Deputy Registrar has absolutely reached finality. Subsequently, the Deputy Registrar by the order dated 28.09.2010 issued the certificate under Section 71 of the Chit funds Act, 1982 in favour of the respondent and permitted the petitioner to recover the said amount by way of attachment of movable properties, immovable properties of the present petitioner through public auction, recovery through salary attachment of the present petitioner and also recovery through all execution modes. The certificate issued by the Registrar dated 28.09.2010 has reached finality. Thereafter, the decree holder filed Execution No.224/2010 to execute the decree. In the Execution petition, the applications came to be filed by the Judgment debtor No.1 under Order 13 Rule 10 r/w Section 151 of CPC and under Sections 33 and 34 of the Act to pay the stamp duty.
5. The trial Court considering the entire arguments advanced and considering the material on record, has recorded a finding that as per the provisions of Section 64 of the Chit Funds Act, 1982, Notwithstanding anything contained in any other law for the time being in force, any dispute touching the management of a chit business shall be referred by any of the parties to the dispute, to the Registrar for arbitration. As per Section 69, Registrar has to pass a decision and as per Section 71, the procedure is prescribed how the award has to be executed and money to be recovered. As per Section 71 of the Chit Funds Act, 1982, every order passed by the Registrar or the nominee under Section 68 or Section 69 of the Act, for payment of any money is deemed to be a decree of a civil court, and shall be executed in the same manner as a decree of such court. The judgment debtor No.1 has failed to substantiate that the Registrar of Co-operative Societies is an arbitrator as prescribed under Article 11 of the Act. Moreover, as per Article 36 of the Chit Funds (Karnataka) Rule 1983, the decree holder has to pay prescribed court fee while referred the dispute to the Registrar. In view of the Certificate produced by decree holder is deemed to be a decree of the civil court, the question of considering as an award does not arise. Therefore, the decree holder is not liable to make payment or stamp duty on the award. Merely because, in the certificate produced as word award has been used by the Joint Registrar, the decree holder is not liabel to make payment of stamp duty, since it is a deemed to be a decree of civil Court. Accordingly, both the applications filed by the present petitioner came to be rejected with cost of Rs.500/- each.
6. A plaint reading of the provisions of Section 64 of the Chit Funds Act depicts with regard to dispute relating to the chit business and Section 69 deals with decision of Registrar or nominee. Section 71 deals with money how recovered.
7. Section 71 of the Chit Fund Act clearly depicts that every order passed by the Registrar or the nominee under Section 68 or Section 69 and every order passed by the State Government in appeal under section 70 for payment of any money shall, if not carried out, on a certificate issued by the Registrar, be deemed to be a decree of a civil court, and shall be executed in the same manner as a decree of such court, or be executed in accordance with the provisions of any law for the time being in force for the recovery of amounts as arrears of land revenue. Provided that no application for execution under clause (b) shall be made after the expiry of three years from the date fixed in the order.
8. In view of the aforesaid provisions of the Act, it is clear that by order dated 28.09.2010, the Deputy Registrar of Co-operative Societies and Chits, Shivamogga granted the decree exercising power under Section 64 of the Chit Funds Act has reached finality and the certificate issued by the Registrar under Section 71 has also reached finality and the trial Court considering the provisions of the Chit Fund Act stated supra has come to the conclusion that the order passed and the certificate issued by the Registrar is deemed to be a Civil Court Decree. Hence, the decree holder is not liable to pay the stamp duty and the same is in accordance with law. The petitioner has not made out any ground to interfere with the impugned order passed by the trial Court exercising power under Article 227 of the Constitution of India.
Accordingly, the petitions are dismissed.
Sd/- JUDGE VM CT:HR