Karnataka High Court
City Co-Operative Bank Limited vs Veena on 11 December, 2023
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WP No. 7563 of 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE C.M. POONACHA
WRIT PETITION NO. 7563 OF 2020 (CS-RES)
BETWEEN:
CITY CO-OPERATIVE BANK LIMITED,
KOTE ROAD, SHIVAMOGGA CITY - 577 202,
REPRESENTED BY ITS SECRETARY
K.M. MANOJ KUMAR,
S/O MANJEGOWDA,
AGED ABOUT 36 YEARS.
...PETITIONER
(BY SRI. P.N. HARISH, ADVOCATE)
AND:
1. VEENA,
W/O SHANKAR,
D/O LATE P. CHIKKANNA,
AGED ABOUT 53 YEARS,
R/O NO. 128, KUMBARAKERI,
NEAR JANAKIRAM TEMPLE,
Digitally SHIVAMOGGA - 577 201.
signed by
BHARATHI S
Location:
2. DEPUTY REGISTRAR OF
HIGH CO-OPERATIVE SOCIETIES,
COURT OF
KARNATAKA SHIVAMOGGA DISTRICT,
SHIVAMOGGA - 577 201.
3. M. SHANKAR,
S/O MARIYAPPA,
MAJOR IN AGE,
PEPSI SOFT DRINKS, KUMBARAKERI,
SHIVAMOGGA CITY - 577 201.
...RESPONDENTS
(BY SRI. SYED AKBAR PASHA, ADVOCATE FOR R1;
SRI. SIDDHARATH BABU RAO, AGA FOR R2;
SMT. KUSUMA RANGANATH, ADVOCATE FOR R3)
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WP No. 7563 of 2020
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED
21.04.2017 PASSED BY KARNATAKA APPELLATE TRIBUNAL
BENGALURU IN APPEAL NO.722/2012 AS PER ANNEXURE-C AND
ETC.,
THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN
'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The present Writ Petition is filed challenging the
judgment dated 21.04.2017 passed in Appeal No.722/2012 by
the Karnataka Appellate Tribunal (hereinafter referred as
'Tribunal').
2. The relevant facts necessary for consideration of
the present Writ Petition are that Respondent No.3 had availed
credit facilities from the Petitioner and due to his failure to re-
pay the same, proceedings for recovery was instituted by the
Petitioner by raising a dispute under Section 70 of the
Karnataka Cooperative Societies Act (hereinafter referred as
'Act'), the adjudication of which was referred to an Arbitrator.
The father of Respondent No.1 was a surety to the loan availed
by Respondent No.3. In the arbitral proceedings Respondent
No.3 is arrayed as Respondent No.1 and the father of
Respondent No.1 is arrayed as Respondent No.2.
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3. It is forthcoming that during the pendency of the
proceedings before the Arbitrator, it has been noticed that the
father of Respondent No.1 who was arrayed as Respondent
No.2 in the said proceedings was deceased and hence, by
award dated 01.09.2005 the Arbitrator held that Respondent
No.1 therein who is Respondent No.3 herein was liable to pay
sum of Rs.1,20,145/- together with interest and liberty was
reserved to the Petitioner to initiate recovery proceedings
against the legal representatives of the deceased Respondent
No.2 therein.
4. The Petitioner instituted the execution proceedings
before Respondent No.2 - Deputy Registrar to execute the
award dated 01.09.2005. In the said proceedings an application
under Rule 45 of the Karnataka Cooperative Societies Rules,
1960 (hereinafter referred to as 'Rules') to bringing the legal
representatives of deceased of the surety on record was filed
by the Petitioner. Respondent No.2 vide order dated
29.09.2012 allowed the said application and permitted to bring
the legal representatives of the surety on record.
5. It is forthcoming from the record that being
aggrieved by the auction proceedings initiated with regard to
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bringing the house property bearing No.128 situated at
Kumbarkeri near Janakiram temple, Shivamoga District, to
sale, respondent No.1 has filed an Appeal No.722/2012 before
the Tribunal. The Petitioner entered appearance in the said
proceedings and contested the same. The Tribunal by its
judgment dated 21.04.2017 allowed the appeal and passed the
following order:
"1. The IA.No.1 filed by the appellant-
applicant u/s 5 of the Limitation Act is hereby
allowed, consequently the delay is condoned.
2. The appeal filed by the appellant is hereby
partly allowed and impugned award in
respect of deceased P.Chikkanna the surety
is set aside. Further it is clarified that the
impugned award is kept intact as against
respondent No.3 - M. Shankar and the
respondent No.2 - Bank can execute the
same against respondent No.3 and his
property.
6. Being aggrieved by the said judgment dated
21.04.2017, the present Writ Petition is filed.
7. Learned counsel for the Petitioner in support of the
reliefs sought for in the present petition contends:
i) That the Arbitrator while passing the award dated
01.09.2005 had reserved liberty to the Petitioner-
Society to initiate proceedings against the legal
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representatives of the deceased surety, which it
has done by filing an application under Rule 45 of
the Rules;
ii) The order dated 29.09.2012 passed by
Respondent No.2 allowing the application to bring
the legal representatives of deceased surety has
not been challenged by Respondent No.1;
iii) Admittedly there are five legal representatives
of deceased surety and only one legal
representative has filed the appeal before Tribunal
and hence, in view of the non filing of the appeal
by other legal representatives the appeal of
Respondent No.1 ought to have been rejected;
iv) That the award dated 01.09.2005 and the order
dated 29.09.2012 passed by the Deputy Registrar
has not been challenged by Respondent No.1;
v) The Tribunal ought to have set aside the order
and remanded the matter for adjudication of the
liability of the legal representatives of the surety;
8. Per contra learned counsel for Respondent No.1
submits that the Tribunal has considered all aspects of the
matter and by its judgment dated 21.05.2017 allowed the
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same, which is not required to be interfered with by this
Court in the present Writ Petition.
9. Learned counsel for Respondent No.3, the
principal borrower submits that he is ready to refund the
money availed and he has no objection for the Bank to
auction the auto rickshaw which was purchased by him
after availing the credit facility from the Petitioner-Bank.
10. The submissions made by the learned counsel
have been considered and the material on record have
been perused. The question that arises for consideration
is, "whether the judgment passed by the Tribunal is
erroneous and liable to be set aside?"
11. It is undisputed that the surety was deceased
during the proceedings before the Arbitrator and that the
legal representatives of deceased surety were not brought
on record in the proceedings before the Arbitrator, before
the award was passed. It is also relevant to note in the
award dated 01.09.2005, the Arbitrator has passed the
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award only against the principal borrower who was
arrayed as Respondent No.3 therein.
12. The Petitioner-Bank is seeking to faster the
liability that has been passed in the award dated
01.09.2005 on he legal representatives of the surety by
filing an application under Rule 45 of the Rules in the
execution proceedings initiated under Rule 34 of the Rules.
13. It is relevant to note the statutory provisions.
The relevant Rules stipulate as under:
"34.1) Every decree-holder requiring
execution of a decree under the provisions of
clause (c) of Section 101, shall apply to the
Recovery Officer within whose jurisdiction the
judgment-debtor resides or has property and
shall deposit the probable cost of execution
as may be fixed by such officer.
45.1) Where a judgment-debtor dies before
the decree has been fully satisfied, an
application under sub-rule (1) of Rule 34 may
be made or continued against the legal
representatives of the deceased and
thereupon all the provisions of this Chapter
shall, save as otherwise provided in this rule,
apply as if such legal representative were the
judgment-debtor.
Provided that a show-cause notice shall be
issued to such legal representative and his
objections heard, before execution is
proceeded against him.
45.2) Where the decree is executed against
such legal representative, he shall be liable
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only to the extent of the property of the
deceased which has come to his hands and
has not been duly disposed of; and for the
purpose of ascertaining such liability, the
Recovery Officer executing the decree may,
of his own motion or on the application of the
decree-holder, compel such legal
representative to produce such accounts as
he thinks fit."
14. It is clear and forthcoming that a decree holder is
entitled to execute a decree by filing an application as
contemplated under Rule 34 of the Rules. It is further
clear that it is open for the decree holder to file an
application under Rule 45 of the Rules for the purpose of
bringing the legal representatives of a deceased.
15. It is clear from the present fact situation that
there is no decree against the deceased surety. The
endeavor of the Petitioner-Bank to foist liability on the
legal representatives of the deceased surety by filing an
application under Rule 45 of the Rules to bring them on
record in the execution proceedings for the first time is ex-
facie erroneous and cannot be sustained.
16. The Tribunal will considering the appeal filed by
Respondent No.1 upon noticing the contentions put forth
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by the respective parties and upon appreciation of the
material available on record has recorded the following
findings:
i) That the death certificate of P. Chikkanna
(Surety) discloses that he died on 15.04.2005.
ii) The dispute was presented on 04.10.2004
during the lifetime of P. Chikkanna and the date
of hearing was fixed on 01.08.2005.
iii) As on date of the award i.e., on 01.09.2005
the surety was deceased.
17. It is clear form the aforementioned that as on the
date of award dated 01.09.2005 surety having been
deceased the endeavor of the Petitioner to bring the legal
representatives of the deceased surety on record in the
execution proceedings for the first time, without there
being any decree/award either against the surety or the
legal representatives and attempting to recover money in
the execution proceedings from the legal representatives
is unsustainable in law.
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18. The Tribunal has also recorded that the
principal borrower has given a statement before the
Tribunal that the bank can seize the auto and auction the
same and recover the loan amount, despite which the
bank has not initiated any proceedings for sale of the
same for reasons best known to it.
19. The contention of the learned counsel for the
Petitioner that certain observations made against the
liability of the surety is erroneous and is liable to be set
aside, is also not required to accepted. The Tribunal, upon
noticing the relevant factual matrix has recorded a finding
that the award having been passed against a dead person,
the same cannot be executed, against the legal
representatives of the deceased P. Chikkanna is just and
proper.
20. It is clear from the aforementioned that the
Tribunal has rightly appreciated relevant facts and allowed
the appeal vide judgment dated 21.04.2017.
21. The Petitioner has failed in demonstrating that
the judgment passed by the Tribunal is in any manner
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erroneous and liable to be interfered with by this Court in
the present Writ Petition. The question framed for
consideration is answered in the negative.
22. In view of the aforementioned, the Writ
Petition filed by the Petitioner is dismissed as being devoid
of merit.
23. Needless to state, this order nor judgment
passed by the Tribunal will come in the way of the
Petitioner-Bank initiating proceedings for recovery of the
amounts due to it from the legal representatives of the
deceased surety and if such proceedings are initiated, it is
open to the legal representatives of the deceased surety to
take such defence as permissible under law in accordance
with law.
SD/-
JUDGE
CT: BHK
