HIGH COURT FOR THE STATE OF TELANGANA
WRIT PETITION No.9059 OF 2008
1. Smt. Dr.G.Lakshmi, W/o Dr.D.V.S.Rama Krishna Prasad,
Aged 42 years, R/o Flat No.1, Block No.16,
HIG, Bagh Lingampally, Hyderabad - 44 and another.
....Petitioner
VERSUS
2. The Prudential Cooperative Bank Ltd.,
Rep. by its Official Liquidator, RP Road,
Secunderabad and three others.
... Respondents
DATE OF JUDGMENT PRONOUNCED: 18.11.2023
THE HONOURABLE SRI JUSTICE J. SREENIVAS RAO
1. Whether Reporters of Local Yes/No
newspapers may be allowed to see the
Judgments?
2. Whether the copies of judgment may Yes/No
be marked to Law Reporters/Journals?
3. Whether Their Ladyship/Lordship wish Yes/No
to see the fair copy of the Judgment?
_____________________
J. SREENIVAS RAO, J
2
THE HONOURABLE SRI JUSTICE J. SREENIVAS RAO
+ WRIT PETITION No.9059 OF 2008
% Dated 18.11.2023
# Smt. Dr.G.Lakshmi, W/o Dr.D.V.S.Rama Krishna Prasad,
Aged 42 years, R/o Flat No.1, Block No.16,
HIG, Bagh Lingampally, Hyderabad - 44 and another.
....Petitioner
VERSUS
$ The Prudential Cooperative Bank Ltd.,
Rep. by its Official Liquidator, RP Road,
Secunderabad and three others.
... Respondents
! Counsel for the Petitioner : Sri Pratap Narayan Sanghi.
^ Counsel for the Respondent : Sri M. Venkat Diwakar.
< GIST:
> HEAD NOTE:
? CITATIONS:
1. AIR 1997 SC 856
2. 2015 4 ALD 270(DB)
3. 2015(1) ALD 278
4. 2009(6) ALD 544
5. 2005 (5) ALD 32
3
HON'BLE SRI JUSTICE J.SREENIVAS RAO
W.P.No.9059 OF 2008
ORDER:
This writ petition is filed seeking writ of certiorari calling for records pertaining to OP.No.38 of 2004 dated 06.04.2005 from AP/TS Cooperative Tribunal Hyderabad and dismiss the same and also all the consequential orders including the order passed by respondent No.3 in Claim Petition No.1 of 2006 in E.P.No.127 of 2006 in O.P.No.38 of 2004 dated 29.09.2007.
2. BRIEF FACTS OF THE CASE:
Petitioners submit that they are the absolute owners and possessors of the House bearing Nos.1-8-248 and 1-8-248/1, consisting of ground and first floors situated at Chikkadpally, Hyderabad ('Scheduled property' for brevity) and the same was purchased from respondent No.2 through registered sale deeds vide documents dated 24.06.2004, bearing Nos.1786 of 2004 and 1807 of 2004. They further stated that originally they were tenants of respondent No.2 and were running nursing home in the Scheduled property. Respondent No.2 offered to sell the Scheduled property and the petitioners after verifying the documents, requested him to furnish the original sale deed dated 07.01.1960 in turn, he informed that he availed loan from M/s. Federal Bank, 4 Lakdikapool, Hyderabad by pledging the original sale deed as collateral security and he furnished the loan account particulars and correspondence papers and the petitioners after verification of the said documents including E.C they have obtained legal opinion. Thereafter, they got issued a public notice in Vaartha Daily newspaper of Hyderabad and Vijayawada editions on 09.03.2004 and invited objections, if any and no one made objections. Thereafter, the petitioners have entered into agreement of sale on 12.04.2004, to purchase the Scheduled property for total consideration of Rs.12.00 Lakhs, each, on a condition that respondent No.2 shall clear the loan obtained by him from the Federal Bank and get the title deed dated 07.01.1960 released from the bank for which respondent No.2 has agreed and the petitioner's paid the sale consideration. Respondent No.2 cleared the loan amount with Federal Bank on 12.04.2004 and furnished the original documents along with no objection letter dated 12.04.2004 from the above said Bank. Thereafter, the petitioners have paid balance sale consideration and respondent No.2 executed registered sale deeds in favour of the petitioners on 24.06.2004 and since then they have been in peaceful possession and enjoyment of Schedule property with absolute rights and their names were mutated in the Municipal records and they are paying municipal taxes and they are running nursing home. 5 2.1. Petitioners further stated that on 22.11.2006, respondent No.3 issued notice under Rule 52(11) (b) and (c) of AP Cooperative Societies Rules in E.P.No.127 of 2006 in O.P.No.38 of 2004. After enquiry the petitioners came to know that respondent No.2 has obtained loan from respondent No.1 allegedly depositing the title deeds in respect of Scheduled property as security and failed to discharge the loan amount. Respondent No.1 bank has filed OP.No.38 of 2004 invoking the provisions of AP Mutually Aided Cooperative Societies Act 1995('Act' for brevity) before Cooperative Tribunal, Hyderabad against respondent No.2 and others and obtained ex-parte Award/decree on 06.04.2005, thereafter filed E.P.No.127 of 2006 for execution of the said Award before respondent No.3. In the said case, the petitioners filed claim petition vide I.A.No.1 of 2006 in E.P.No.127 of 2006 in O.P.No.38 of 2004, raising several grounds stating that they have purchased the Scheduled property through registered sale deeds on 24.06.2004 and they are bonafide purchasers and they are having right, interest, title over the property and before purchasing the said property they have issued the public notice inviting objections, if any. They further submitted that alleged mortgage deeds executed in favour of respondent No.1 are not registered documents and the same required registration and the petitioners are having right, interest and title over the subject property and 6 prayed respondent No.3 to consider the claim of the petitioners. Respondent No.3 without properly considering the grounds raised in the claim petition passed the impugned order without giving any reason simply stating that ex-parte award passed by Cooperative Tribunal dated 06.04.2005, has become final and respondent No.2 has committed default and claim of the bank against respondent No.2 is established and there is no merit in the claim petition. Questioning the said order, the petitioners filed the present writ petition.
3. Heard Sri Pratap Narayan Sanghi, learned Senior Counsel and Sri M.Venkata Diwakar, learned counsel appearing on behalf of respondent No.1 and in spite of service of notices, respondent Nos.2 and 4 have not entered appearance.
4. Learned Senior Counsel contended that petitioners are originally tenants of the Scheduled property and they are running nursing home in the name and style of Shree Hospital. Respondent No.2 who is the owner of the said property offered to sell the same. Petitioners after due verification of the records including encumbrance Certificate and after obtaining the legal opinion they have entered agreement of sale on 12.04.2004 and they issued a public notice informing General public in two news papers calling objections, if any, and no one has made objections 7 including respondent No.1 and after expiry of the time mentioned in the said notice, petitioners have obtained the registered sale deed by paying balance sale consideration on 24.06.2004 and their names were mutated in the municipal records and they are paying the property tax and they are absolute owners and possessors of the Scheduled Property.
4.1 He further contended that respondent No.1 sanctioned the loan to the respondent No.2 basing upon the unregistered documents i.e., mortgage by depositing title deeds and the same required registration as per the provisions of Registration Act, 1908. Hence, the entire transaction is contrary to law. He also contended that claim petition filed by the petitioners is very much maintainable and respondent No.3 has to adjudicate the said claim petition as a independent suit, but respondent No.3 without considering the grounds raised by the petitioners in the claim petition, passed the impugned order without giving any reasons simply holding that the ex-parte award passed by Cooperative Tribunal dated 06.04.2005, is unchallenged and respondent No.1 proved that respondent No.2 has availed the loan and committed default and the same is contrary to law.
4.2 He further contended that as per the provisions of Order XXI Rule 58 of CPC claim petition/objection filed by the petitioners 8 has to be determined and decided as independent suit and as per the provisions of Order XXI Rule 58 of CPC, as the petitioners purchased the Scheduled property through registered documents, by paying valuable sale consideration and they are in possession of the property, they are having right, interest, title over the said property. Respondent No.3 without following the mandatory procedure prescribed under law passed the impugned order. He also contended that as per the provisions of AP/TS Mutually Aided Cooperative Society Act, 1995 against the impugned order passed by respondent No.3, no remedy of appeal is provided and the writ petition filed by petitioners is very much maintainable under law. In support of his contentions he relied upon the following judgments:
1) Brahmdeo Chaudhary v. Rishikesh Prasad Jaiswal 1
2) The Prudential Cooperative Bank Ltd. Vs. The
A.P.Cooperative Tribunal at MJ Market, Nampally,
Hyderabadand others 2.
5. Per contra, learned counsel appearing on behalf of
respondent No.1-bank submits that writ petition filed by the petitioners is not maintainable under law as per the provisions of 1 AIR 1997 SC 856 2 2015 4 ALD 270 (DB) 9 Rule 52(21) and Rule 52(21)(c) of Telangana Cooperative Societies Rules 1964(for brevity 'Rules') and the petitioners ought to have filed the suit before competent Civil Court. He further contended that respondent No.2 availed the loan from respondent No.1 bank by creating mortgage by depositing the title deeds and that the debt between respondent No.1 and respondent No.2 is secured debt and the claim petition filed by the petitioners invoking the provisions of Rule 21-A of Rules is not maintainable in respect of mortgaged property. He further contended that subject property was not attached by the respondent No.1 bank and the question of consideration of the application filed by the petitioners as a independent suit does not arise and the provisions of the Order XXI Rule 58 of CPC is not applicable. He further contended that the charge created by respondent No.2 in favour of respondent No.1 bank is first charge. Respondent No.2 availed the loan from Federal Bank subsequent to the loan availed from the respondent No.1 bank and the petitioners without verifying the same purchased the property which was already under mortgage in favour of respondent No.1 bank and they are not entitled to raise any claim on the Scheduled property. In support of his contentions he relied upon the following judgments: 10
1) Indian Bank v. Nallam Veera Swamy 3.
2) Gopana Subba Rayudu v. Pasupuleti Venkata Ramana 4.
6. Having considered the rival submissions made by respective parties and upon perusal of the material available on record following points arises for consideration.
1. Whether the impugned order passed by respondent No.3 dismissing the claim petition filed by the petitioner invoking the Rule 21(a) of AP/TS Cooperative Rules 1964 is in accordance with law?
2. Whether the writ petition filed by the petitioner under law invoking the provisions of Article 226 of Constitution of India is maintainable?
3. Whether the petitioners are entitled any relief sought in this writ petition?
Point Nos.1 to 3
7. It is undisputed fact that the petitioners have purchased the Scheduled property from respondent No.2 through registered sale deeds dated 24.06.2004 and their names were mutated in the concerned records and they are in physical possession of the said property. It also reveals from the record that respondent No.2 availed the loan from Federal Bank and after clearing the said loan he sold the Scheduled property in favour of the petitioners. The petitioners prior to obtaining the registered sale deeds they have 3 2015 (1) ALD 278 4 2009 (6) ALD 544 11 issued public notice in two daily newspapers which are having vide publication informing the general public that they entered into agreement of sale to purchase the Scheduled property from respondent No.2 calling objections. Pursuant to the said notice, no one has made objections including respondent No.1 bank. It further appears from the records that in the encumbrance certificate also mortgage/deposit of title deeds in favour of respondent No.1 bank was not reflected.
8. The records further reveals that respondent No.1 filed O.P.No.38 of 2004 before Cooperative Tribunal, Hyderabad, against respondent No.2 and two others wherein the petitioners are not parties and the respondents therein have not contested the matter and the Cooperative Tribunal passed the ex-parte award on 06.04.2005. Respondent No.1 bank filed E.P.No.127 of 2006 for enforcement of the said award. In the said E.P. respondent No.3 issued notice. As soon as after receiving the notice in the said E.P., the petitioners came to know about passing of the ex-parte award and they filed claim petition No.1 of 2006 to resist the execution of the award by raising several grounds that they are having right, interest, title over the Scheduled property, pursuant to the registered sale deed dated 24.06.2004, executed by respondent No.2 and they are bonafide purchasers and respondent 12 No.3 without adjudicating the objections raised by the petitioners and without giving any reasons passed the cryptic order.
9. It is very much relevant to mention here that even assuming that the provisions of Order XXI Rule 58 of CPC is not applicable to the petitioners, they are entitled to resist the delivery of possession of immovable property to decree holder purchaser by making objections invoking provisions of Order XXI Rule 97 of CPC. It is very much relevant to extract above said provision which reads as follows:
"97. Resistance or obstruction to possession of immovable property,- (1) Where the holder of a decree for the possession of immovable property or the purchaser of any such property sold in execution of a decree is resisted or obstructed by any person in obtaining possession of the property, he may make an application to the Court complaining of such resistance or obstruction.
(2) Where any application is made under sub-rule (1), the Court shall proceed to adjudicate upon the application in accordance with the provisions herein contained."
10. In Brahmdeo Chaudhary (supra 1) the hon'ble Apex court held as follows:
The court emphasizes that Order 21 of the Civil Procedure Code provides an extensive framework for addressing disputes related to the execution of possession decrees. When somebody else resists the decree, the decree-holder's remedy is exclusively under Order 21, Rule 97, sub-rule (1). The court rejects the notion of bypassing this procedure and insists on following the prescribed process. It criticizes the High Court's view that a stranger's only remedy lies in Order 21, Rule 99, disregarding the prior stage outlined in Order 21, Rule 97, thus violating principles of natural justice.Parallel proceedings are 13 discouraged by the statutory structure, which extends from Rule 97 to Rule 103, and is regarded as an extensive code.
In the above judgment the Hon'ble Apex Court held that the person who is in possession of the immovable property is entitled to resist the delivery of possession to decree-holder or purchaser by invoking the provisions of Order XXI Rule 97 of CPC.
11. In the Prudential Cooperative Bank Ltd(supra 2)this court held that :
The judgments scrutinize the application of provisions from the 1964 Act, notably Rule 52, in the context of executing awards under the A.P. Mutually Aided Co-operative Societies Act, 1995. Furthermore, they address the interpretation of Section 36 of the 1995 Act, suggesting a statutory right to appeal despite its absence. This underscores the legislative nature of creating an appeal right, beyond the court's power to confer or deduce. The text queries the practicality of appealing orders under Section 37 of the 1995 Act to the Co- operative Tribunal, emphasizing the potential absurdity of appealing to the same entity that issued the order. Additionally, it delves into the applicability of Rule 52 from the Andhra Pradesh Cooperative Societies Rules, 1964, in executing awards under the 1995 Act. The emphasis lies on interpreting and applying statutory provisions judiciously to prevent rendering them ineffective. The overarching principle is the pragmatic and purposeful interpretation of statutory provisions.
In the result, we answer the reference holding that a person aggrieved by a decision of the Tribunal under Section 37 of the 1995 Act, has no statutory remedy of an appeal there against, much less to the Tribunal itself, and the judgment in S. Varalakshmi1, to the extent it held that an appeal lies to the Tribunal, does not lay down the correct law. The Tribunal is also entitled to invoke Rule 52 of the 1964 Rules, and to follow the procedure prescribed therein, in executing awards under the 1995 Act.14
In the above judgment the Division Bench of this Court held that aggrieved by the decision of the Tribunal Under Section 37 of the 1995 Act no statutory remedy of appeal is provided and the Tribunal is having power to invoke Rule 52 of the 1964 Rules. Hence the application filed by the petitioner is maintainable before respondent No.3.
12. In the case of Indian Bank (supra3), the court emphasized that no claim petition would be maintainable under Section 47 or Order 21 Rule 58 in the execution of a mortgage decree. The court clarified that during the execution of a mortgage decree; only the incorporeal right is brought to sale and not the physical property. According to the Transfer of Property Act, 1882, specifically under sections 58 and 60, the right of the mortgagor is referred to "equity of redemption" and the principle against clogs on the equity of redemption, mortgagor's right to redeem should not be taken away or limited by any contractual agreement between the parties. As long as the mortgagor retains the right to redeem the mortgage, they have the option to pay off the debt along with interest, thereby reclaiming possession of the mortgaged property. This legal position remains in force until the property is sold under a decree of sale executed in accordance with the provisions outlined in Order 34 of the Code of Civil Procedure (CPC). 15
13. In the case of Gopana Subba Rayudu (Supra 4), the court held that the filing of a claim petition under the provisions of CPC Order 21 Rule 58 is permissible only when the property in has been attached or is pending disposal. The court held that parties do not have the entitlement to submit a claim petition if the property has not been attached.
14. In the above cases this Court held that in respect of mortgaged property provisions of Order XXI Rule 58 are not applicable, in the present case the petitioners are claiming the rights over the Scheduled property basing on the registered sale deed documents dated 24.06.2004 and they are in physical possession of the said property, hence, they are entitled to make resistance/objections invoking the provisions of Order XXI Rule
97.
15. It is already stated supra that petitioners and respondents raised several disputed questions of facts and respondent No.3 without considering the same passed the impugned order and the same is contrary to law. Point No.1 is answered accordingly.
16. In G. Gangaram Vs. APSEB, Hyderabad 5 this Court relying upon the judgment of division bench of this Court in 5 2005 (5) ALD 32 16 2003 (5) ALD 599 (DB) specifically held in paragraph No.6 that the writ petition which has been admitted and pending in this Court for more than eleven years, it is neither just nor proper for this Court to now refuse to exercise the discretion and dismiss the writ petition on the ground of availability of alternative remedy which reads as follows:
6. Existence of alternative remedy is not a bar for exercise of jurisdiction under Article 226 of the Constitution of India. It is well settled that while existence of an effective alternative remedy would be a factor to be taken into consideration by this Court for invoking its jurisdiction under Article 226 of the Constitution, it does not bar the jurisdiction of this Court to entertain a writ petition solely on the ground that the alternative remedy has not been exhausted. This Court under Article 226 of the Constitution of India, normally refuses to exercise its discretion to interfere at the threshold on the ground of availability of an effective alternative remedy. Having admitted the writ petition, which has been pending in this Court for more than eleven years, it is neither just nor proper for this Court to now refuse to exercise its discretion and dismiss the writ petition on the ground of availability of alternative remedy.
17. In so far as point No.2 is concerned, the petitioner filed present writ petition before this Court on 21.04.2008 and the same was admitted on 23.04.2008 and interim stay was also granted and respondent No.1 filed counter on 28.11.2022. In view of the above judgment, after lapse of more than 15 years the respondent bank is not entitled to raise such objection of maintainability of the writ petition. Hence, point No.2 is answered. 17
18. In view of the foregoing reasons, the impugned order dated 29.09.2007 passed by respondent No.3 is liable to be set aside. Accordingly set aside and the respondent No.3 is directed to pass appropriate orders on merits in the claim petition No.1 of 2006 in E.P.No.127 of 2006 in O.P.No.38 of 2004, in accordance with law, by giving opportunity to the petitioners as well as respondent No.1 bank as early as possible preferably within a period of two(2) months from the date of receipt of a copy of this order. It is needless to observe that the amount deposited by the petitioner, pursuant to the interim order dated 23.04.2008 granted by this Court, shall continue in Fixed Deposited Receipt in the same bank till the disposal of the claim Petition No.1 of 2006 and the said deposit is subject to outcome of the above claim petition No.1 of 2006. Point No.3 is answered accordingly.
19. With the above directions, the writ petition is disposed of accordingly. No costs.
As a sequel thereto, miscellaneous applications, if any, pending in this writ petition, shall stand closed.
_____________________________ JUSTICE J. SREENIVAS RAO 18th November, 2023 PSW