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Yarlagadda Rattayya Vs. Modumudi Co-operative Credit Society Represented by Its President Sanaka Rattayya and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtChennai
Decided On
Reported inAIR1943Mad231; (1942)2MLJ603
AppellantYarlagadda Rattayya
RespondentModumudi Co-operative Credit Society Represented by Its President Sanaka Rattayya and ors.
Cases ReferredHafez Uzir Ali v. Nasimannessa Bibi
Excerpt:
.....the sale, that the award must be considered to have been fully satisfied and that consequently the decree could not be executed as against the appellant and decreed the suit......recovering. macha koundan v. kottora koundan : (1935)69mlj750 . was the case of a purchaser at a sale, in execution of a decree of a civil court getting a similar decree. so far as this point is concerned there is no difference between the purchaser in a sale held by a sale officer under the co-operative societies act and the sale held by a civil court. it is true there is no provision similar to order 21, rules 91 to 93 in the rules framed under the co-operative societies act, but then the decision in macha koundam v. kottora koundan : (1935)69mlj750 . was not based on any right claimable under order 2'1, rules 91 to 93. the purchaser could get a decree because the interest of the judgment-debtor was absolutely nil and there was not even a shadow of a claim that could be set up in his.....
Judgment:

Kuppuswami Ayyar, J.

1. The plaintiff is the appellant and the appeal arises out of a suit for a declaration that it is not open to defendants 1 and 3 to take out execution proceedings against the property described in the plaint and claimed by the plaintiff as his own. The properties in question and another item of property were originally mortgaged to the 1st defendant Co-operative Society by the 2nd defendant. Subsequently there was a sale in respect of the properties comprised in the suit to the plaintiff-appellant without disclosing the prior mortgage and as if there were no incumbrances in the property. The Deputy Registrar of Co-operative Societies, Bezwada acting as a Sale Officer, in execution of the award passed in respect of the mortgage ordered the sale of a property which was not mortgaged and which did not belong to the 2nd defendant. Money was realised by the sale and out of the sale proceeds the Co-operative Society was paid the amount due to it under the award. The balance of the amount was paid over to the 2nd defendant as if he were the Owner of it. The purchaser subsequently found that the property did not belong to the 2nd defendant and was not mortgaged to the Society and that there was a mistake in the sale and moved the Deputy Registrar to set aside the sale. He set aside the sale accordingly. The 1st defendant Society thereupon moved the 3rd defendant to execute the award by proceeding against the properties which were the subject-matter of the same. The plaintiff-appellant who is entitled to two of the properties by right of purchase subsequent to the mortgage wants a declaration that, inasmuch as the award had been fully satisfied by payment of the money realised by the sale of the incorrect item, it will not be open to the 1st defendant to execute the decree, his further contention being that the order setting aside the sale was without jurisdiction and invalid and consequently, the decree must be considered to have been fully satisfied and that no, execution could be taken out as against his properties.

2. The first Court found that the Deputy Registrar had no jurisdiction to set aside the sale, that the award must be considered to have been fully satisfied and that consequently the decree could not be executed as against the appellant and decreed the suit. But the lower appellate Court, though it came to the conclusion that the Deputy Registrar had no jurisdiction to set aside the sale, was of opinion that the plaintiff's remedy was not by means of a separate suit and that the proper course was to take proceedings under Section 57 of the Co-operative Societies Act and that the suit was hence not maintainable. He allowed the appeal and dismissed the suit. Hence this appeal.

3. The points for consideration are:

(1) Whether the order of the Deputy Registrar setting aside the sale is invalid?

(2) If so, was the plaintiff entitled to file the suit for a declaration that the decree cannot be executed ?

(3) Whether the plaintiff is entitled to the discretionary relief sought for, in view of the fact that the 1st defendant had, subsequent to the suit, to pay the money which he realised in satisfaction of the decree back to the purchaser?

4. Point No. 1.--The respondents' contention is that the proviso to Clause (in), Sub-rule (10) of Rule 22 framed under the Co-operative Societies Act enabled the Deputy Registrar to set aside the sale at any time. I do not think so. The proviso is only a proviso to Clause (3) and comes before Clause (4). The Deputy Registrar has powers under that proviso to set aside a sale only before confirmation and! not subsequent to confirmation. And that is exactly what the first appellate Court has also found. I therefore find that the order passed by the Deputy Registrar was invalid and was passed without jurisdiction.

5. Point No. 2.--I do not think the lower appellate Court was justified in finding that the remedy of the plaintiff was to proceed under Section 57 of the Co-operative Societies Act. The appellant was not a party to the execution proceedings and he is not a person who derives an interest subsequent to these proceedings from any of the parties to the proceeding. He could not therefore move the Registrar of the Co-operative Societies under Section 57. An injury will be caused to him if the property, which was not liable to be proceeded in execution for realisation of the money due under an award, is proceeded against and he is deprived of the property. He has therefore reasonable apprehensions of an injury being caused to him and is entitled therefore to move Civil Court to prevent the injury being so caused. The suit hence was maintainable.

6. Whatever may be the effect of the order of the Deputy Registrar setting aside the sale, there is this fact, namely, that a suit was filed by the purchaser against the 1st defendant and a decree was obtained for return of the purchase money. The appellant no doubt was not a party to the suit. But he could not in the nature of things be made a party to the suit. It is not disputed that the property sold was a property which could not be sold in execution of the decree and it was not the property of the 2nd defendant. Consequently, the sale was improper. If the sale was improper and there was absolutely no vestige of any shadow of a title to the properties in the judgment-debtor, the purchaser was entitled to recover the money from the decree-holder and that was exactly what he had been able to succeed in recovering. Macha Koundan v. Kottora Koundan : (1935)69MLJ750 . was the case of a purchaser at a sale, in execution of a decree of a Civil Court getting a similar decree. So far as this point is concerned there is no difference between the purchaser in a sale held by a Sale Officer under the Co-operative Societies Act and the sale held by a Civil Court. It is true there is no provision similar to Order 21, Rules 91 to 93 in the rules framed under the Co-operative Societies Act, but then the decision in Macha Koundam v. Kottora Koundan : (1935)69MLJ750 . was not based on any right claimable under Order 2'1, Rules 91 to 93. The purchaser could get a decree because the interest of the judgment-debtor was absolutely nil and there was not even a shadow of a claim that could be set up in his favour, This is a similar case. When the money realised by the execution of a decree had to be paid to the purchaser by the decree-holder, then he will be entitled to execute the decree. This is pointed out in Hafez Uzir Ali v. Nasimannessa Bibi : AIR1928Cal865 . , and I entirely agree with the observations of the learned Judge in that case. Consequently it cannot be said that to-day it will not be open to the 1st defendant to execute the decree. It is true on the date of the suit, the plaintiff was entitled to a decree; but it is a discretionary relief that he is asking for and I do not think I will be justified in giving him the relief now. It will be improper to issue the injunction as the 1st defendant had acquired a right to execute, the decree subsequent to the filing of the suit by paying the amount to the purchaser in execution of the decree obtained against him for refund of the purchase money.

7. It is true that the appellant complains that he is a bona fide purchaser for value without notice of the mortgage and that the 2nd defendant may be asked to proceed against the other property of the judgment-debtor. But that is a matter for the executing Court to consider and if the appellant is able to satisfy the Court that he was a bona fide purchaser and that no injury would be caused to the judgment-debtor, or any other person by execution being directed against the other property, it would be open to the Sale Officer to proceed against it before proceedings against the properties of the appellant. It is a matter to be decided by him after hearing both sides and considering all the facts which may be presented to him.

8. In the result, the second appeal is dismissed. Each party will bear his own costs in all the three Courts inasmuch as it is the events which have transpired subsequent to the filing of the suit that have resulted in the plaintiff being refused the relief which he asked for and which he was entitled to on the date of the plaint.

9. Leave refused.


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