Karnataka High Court
Sri K T Prakash vs Sri Umesh C on 21 July, 2023
Bench: H.P.Sandesh
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF JULY, 2023
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CIVIL REVISION PETITION NO.177/2023
BETWEEN:
1. SRI K.T. PRAKASH
AGED ABOUT 68 YEARS,
S/O LATE K.G. TULASIRAM,
RESIDING AT NO 2,
GROUND FLOOR,
2ND BLOCK, 3RD STAGE,
BASAVESHWARANAGAR,
BANGALORE-79.
SRI K.T. GOPALAKRISHNA
SINCE DECEASED ON 06-06-2022
DURING THE PENDING SUIT
BY HIS LEGAL HEIRS
2. SMT. K.G. SAROJA
AGED ABOUT 63 YEARS,
W/O SRI K.T.GOPAL KRISHNA,
RESIDING AT NO.10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04.
3. KUM. MAHIMA
AGED ABOUT 21 YEARS
D/O SRI K.T.GOPAL KRISHNA,
RESIDING AT NO.10,
NEW HIGH SCHOOL ROAD,
2
V.V. PURAM,
BANGALORE-04
4. SRI K.T. GOVARDHAN
AGED ABOUT 64 YEARS,
S/O LATE K.G. TULASIRAM,
RESIDING AT NO.2, 1ST FLOOR,
2ND BLOCK, 3RD STAGE,
BASAVESHWARANAGAR,
BANGALORE-79
5. SRI K.T. SUDARSHAN
AGED ABOUT 61 YEARS,
S/O LATE K.G.TULASIRAM,
R/AT NO.10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04
6. SRI K.V. NAGESH
AGED ABOUT 73 YEARS,
S/O LATE K.G.TULASIRAM,
R/AT NO 10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04
7. SMT. K.V.NAGARATHNA
AGED ABOUT 73 YEARS,
W/O LATE K.T. VENKATAGIRI,
R/AT NO.10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04.
8. SMT. K.V. SUNITHA
AGED ABOUT 53 YEARS,
D/O LATE K.T. VENKATAGIRI,
R/AT NO.10,
3
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04
9. SMT. K.V. REKHA
AGED ABOUT 49 YEARS,
D/O LATE K.T. VENKATAGIRI,
R/AT NO.10,
NEW HIGH SCHOOL ROAD,
V.V. PURAM,
BANGALORE-04. ... PETITIONERS
(BY SRI SOMNATH H.S., ADVOCATE)
AND:
1. SRI UMESH C.,
AGED ABOUT 49 YEARS
S/O LATE M. CHIKKAMADA,
R/AT NO.48, 1ST MAIN, 2ND CROSS,
BHUVANESHWARANAGAR,
BEHIND KEDAPASWAMY MUTT,
BENGALURU-560023
2. SRI DEVARAJ C
AGED ABOUT 63 YEARS,
S/O SRI CHIKKARANGAPPA,
R/AT NO.975, 2ND CROSS,
4TH BLOCK, HMT LAYOUT,
NELAGADARANAHALLI,
NAGASANDRA,
BENGALURU-560073
3. SRI K.N. OMPRAKASH
AGED ABOUT 62 YEARS,
NEW NO.33, 4TH CROSS,
S.P. EXTENSION,
MALLESHWARAM,
BANGALORE-560003
4
4. KEB EMPLOYEES CO-OPERATIVE SOCIETY LTD.,
A SOCIETY REGISTERED UNDER THE PROVISIONS
OF THE CO-OPERATIVE SOCIETIES ACT,
PREVIOUSLY HAVING ITS
REGISTERED OFFICE AT
ANANDA RAO CIRCLE,
BENGALURU
AND PRESENTLY KNOWN AS KPTCL
EMPLOYEES CO-OPERATIVE SOCIETY LTD,
AT BESCOM, DAS BUILDING
INTEGRATE CONTROL CENTRE II SIDE,
RAJAJINAGAR,
BENGALURU-560010
REPRESENTED BY ITS SECRETARY,
SRI K. SHIVAKUMAR
5. SRI K.P.CHAMPAKADHAMASWAMY
AGED ABOUT 65 YEARS,
S/O LATE K.S. PUTTASWAMY,
R/AT NO.291, 1ST 'A; MAIN,
2ND STAGE, MAHALAKSHMIPURAM,
BENGALURU-560086. ... RESPONDENTS
(BY SRI K.SUMAN, SENIOR COUNSEL A/W.
SRI SIDDHARTH SUMAN, ADVOCATE FOR R1 TO R3 & R5;
SRI K.S.KALLESHAPPA, ADVOCATE FOR R4)
THIS CRP IS FILED UNDER SECTION 115 OF CPC,
AGAINST THE ORDER DATED 07.01.2023 PASSED ON I.A.NO.IV
IN O.S.NO.731/2019 ON THE FILE OF THE ADDITIONAL SENIOR
CIVIL JUDGE, NELAMANGALA, DISMISSING THE I.A.NO.IV FILED
UNDER ORDER 7 RULE 11(a) AND (d) OF CPC FOR REJECTION
OF PLAINT.
THIS CRP HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON 06.07.2023 THIS DAY, THE COURT PRONOUNCED
THE FOLLOWING:
5
ORDER
This revision petition is filed challenging the order dated
07.01.2023 passed on O.S.No.731/2019 on the file of the I
Additional Senior Civil Judge and JMFC, Nelamangala.
2. Heard the learned counsel appearing for the
respective parties.
3. The petitioners herein have filed an application under
Order VII Rule 11(a) and (d) of CPC before the Trial Court for
rejection of the plaint on the ground that the same does not
disclose cause of action and also it is barred under Section 118
of the Karnataka Co-operative Societies Act. In support of this
application, defendant No.3 sworn to an affidavit contending that
the suit is filed by the plaintiffs seeking the relief of declaration
to declare that the compromise entered between defendant No.1
i.e., society and defendant Nos.2 to 9 is not binding on
defendant No.1 and its members since, the plaintiffs being the
members of defendant No.1 society have no independent right,
title, interest to challenge the compromise decree passed in
O.S.No.360/2012 and the said compromise decree has been
passed in the interest of defendant No.1 society and its site
owners and defendant No.1 and its members have taken all the
benefits under the terms of compromise. It is also contended
that the plaintiffs in the suit are neither parties in
O.S.No.360/2012 nor they are individual parties to the
compromise entered into between defendant No.1 society and
defendant Nos.2 to 9 culminating into a decree in
O.S.No.360/2012 and the plaintiffs are not signatories to any of
the documents thus, they are strangers to these documents.
The plaintiffs are none other than the members of defendant
No.1 society who are also admittedly ex-directors of defendant
No.1 society. Therefore, whatever acts done by defendant No.1
society by getting approvals in the general body meetings are
binding on the plaintiffs. It is also contended that the suit is
barred under Section 118 of the Karnataka Co-operative
Societies Act and jurisdiction of the Court is expressly barred and
High Court has not given any liberty to the plaintiffs to file the
present suit but the plaintiffs falsely contend that liberty was
given in the said petition. It is also contended that the plaintiffs
have challenged the compromise decree passed in
O.S.No.360/2012 by filing an application under Order XXIII Rule
3(a) of CPC before this Court and this Court vide order dated
17.09.2019 was pleased to dismiss the said application holding
that the grievance of the plaintiffs is touching upon the
management of the business of defendant No.1 society.
Therefore, such dispute raised by the plaintiffs comes within the
purview of Section 70 of Karnataka Co-operative Societies Act.
Hence, it requires to invoke Order VII Rule 11(a) and (d) of the
CPC.
4. This application was resisted by filing an objection
statement contending that in the plaint, it is specifically stated
that they have issued a notice under Section 125 of the
Karnataka Co-operative Societies Act before filing of the suit and
there is an averment in this regard in the plaint itself and also
permission is sought to file the suit before expiry of the period
and hence, the suit is not barred under Section 118 of the
Karnataka Co-operative Society Act. It is also contended that in
writ petition, a liberty was given stating that it is open to the
respondents to work out their remedy by filing an appropriate
suit challenging the compromise decree on the grounds that
would void a contract, on which such a decree is founded. On
that observation, writ petition was disposed off and hence, they
cannot contend that no liberty is given in the writ petition. It is
contended that when an earlier application was filed under Order
XXIII Rule 3(a) of CPC, same has been considered by the Trial
Court as well as by the High Court, now, they cannot contend
that the plaint has to be rejected. It is also contended that in
paragraph 8 of the application it is stated that the plaintiffs have
clearly admitted at paragraphs 14 and 17 of the plaint that the
dispute involved in the present suit touches the policy and basic
administration of defendant No.1 society is totally incorrect and
meaningless in view of the express contention of fraud pleaded
by the plaintiffs in the above suit and the said aspect has also
been duly considered by the High Court in W.P.No.50638/2019,
under the circumstances, they cannot maintain an application
under Order VII Rule 11(a) and (d) of CPC.
5. The Trial Court having considered the grounds urged
in the application and also the objections, formulated the point
that whether the defendants have made out the grounds to
reject the plaint. The Trial Court relied upon the judgment of the
Apex Court reported in (2017) 13 SCC 174 in the case of
MADANURI SRI RAMACHANDRA MURTHY vs SYED JALAL
and so also the judgment reported in (2020) 7 SCC 366 in the
case of DAHIBEN vs ARVINDBHAI KALYANJI BHANUSALI
(GAJRA) DEAD THROUGH LEGAL REPRESENTATIVES AND
OTHERS and also extracted Section 118 of the Karnataka Co-
operative Societies Act to see that whether there is bar of
jurisdiction of Courts and also taken note of the judgment of the
Apex Court reported in (2012) 5 SCC 642 in the case of
MARGET ALMEIDA AND OTHERS vs BOMBAY CATHOLIC
CO-OPERATIVE HOUSING SOCIETY LIMITED AND OTHERS
and the judgment of the Apex Court reported in (2020) 6 SCC
629 wherein the Apex Court considered the ratio that stranger
to the compromise cannot challenge the compromise decree by
way of separate suit. But taken note of the fact that already an
application was filed under Order XXIII Rule 3(a) of CPC before
Trial Court and the same was rejected and against that order,
writ petition was filed wherein liberty was given and accordingly,
they have filed the suit and for that reason, the application filed
under Order VII Rule 11(a) and (d) was dismissed. Hence, the
present revision petition is filed before this Court.
6. The main contention of the counsel for the
petitioners before this Court that the Trial Court fails to consider
the application filed under Order VII Rule 11 (a) and (d) of CPC
and the grounds urged in the said application. It is settled law
that the strangers cannot seek the relief of setting aside the
decree and the very order of the Trial Court construing and
assuming that the liberty granted by the High Court supersedes
the law laid down by the Apex Court is in itself is opposed to law
and judicial hierarchy. The counsel in support of his arguments
relied upon the judgment of Triloknath Singh vs. Anirudh Singh
reported in (2020) 6 SCC 629 and also Sree Surya Developers
and Promoters vs. N Shyleshprasad and others reported in
(2022) 5 SCC 736 and contends that a stranger cannot challenge
the judgment and decree passed on the compromise and the
Trial Court failed to appreciate that under Order XXII Rule 3(a)
of CPC, there is a clear bar on suit seeking an order for setting
aside of compromise decree on the ground that compromise on
which the decree is based was not lawful. The counsel also
vehemently contend that the relief sought is declaratory relief
against the compromise decree and the relief sought in the
earlier suit is to declare that the Power of Attorney is
unenforceable and the earlier suit is for 10 acres and
subsequently in respect of 'B' karab land, the same was got
regularized and subsequently, compromise has been entered
between the parties for making additional payment. In the
application, it is specifically contend that there is no cause of
action and also the suit is barred by law under Order XXIII Rule
3(a) of CPC. When such ground is urged, the Trial Court ought
to have allowed the application.
7. Per contra, the counsel for the respondents would
vehemently contend that in the suit, the specific averment is
made to show that under what circumstances, the compromise
was entered into and the plaintiffs are the directors for the
period from 2013 to 2018 and compromise was entered in the
year 2017 and the same is not in the interest of the society and
the plaintiffs are also the directors, members of the society and
no resolution was passed in this regard. The counsel also
vehemently contend that the earlier order passed by this Court
in W.P.No.50638/2019 liberty was given and already they have
approached the Court and when an application is filed under
Order XXIII Rule 3(a) of CPC seeking cancellation of the said
compromise decree and the same was questioned and when
liberty was given by this Court, an application was also filed in
O.S.No.360/2012 and when the same was not considered,
without any other option, the suit was filed stating the cause of
action in paragraphs 33 and 34. The counsel also would contend
that in the plaint it is specifically pleaded in paragraphs 13 to 16
that under what circumstances, the compromise was entered
and the Court has to look into only the averments of the plaint
and not the defence in an application filed Order VII Rule 11 of
CPC. The counsel also vehemently contend that earlier also
there were sale agreement, sale deed, GPA and challenge is only
in respect of GPA and the suit is also for 10 acres of property
and compromise was in respect of other than the subject matter
of the suit. It is also contended that defendant No.1 was deleted
and compromise was entered between the plaintiffs and the
society and the same was challenged and the reasons are also
set out in the plaint. The counsel also would contend that the
suit for recovery is also pending and karab land not belongs to
the plaintiffs who entered into a compromise.
8. In support of the arguments, the counsel for the
respondents produced the documents that is copy of the
registered sale deed dated 02.03.1981, copy of the registered
sale deed dated 08.03.1989, copy of the agreement of sale
dated 27.12.1992, registered GPA dated 17.03.1993, copy of the
agreement of sale dated 09.02.1995, copy of registered GPA
dated 14.02.1995, copy of RTC extracts, copy of intimation,
conversion order, survey tippani, approved layout plan, copy of
plaint and written statement in O.S.No.143/2006, copies of
letters dated 23.12.2016 sent by respondent Nos.1 to 3 to the
President/Secretary of respondent No.4 society opposing the
proposal for illegally compromising the suit with the petitioners
and another letter dated 10.12.2017 and copy of the sale
agreement dated 14.02.1995 executed by M A Eswarappa in
favour of M/s Karnataka Electricity Board Employees Co-
operative Society Limited and so also GPA and copy of the
relinquishment deed dated 02.07.2004 executed by
Narasimaiah, M A Eshwarappa, K T Venkatagiri, K T Prakash, K T
Gopalakrishna, K T Govardhana, K T Sudarshan represented by
their GPA holders.
9. In reply to the arguments, the counsel for the
petitioners would vehemently contend that the Trial Court has
committed an error in dismissing the application when already
the Trial Court granted an order of stay, there cannot be one
more suit in respect of the issue involved between the parties
and in view of the filing of a suit, the affected parties are
members of the society who have purchased the sites and in
view of the pendency of the suit, the members of the society
cannot enjoy their right since they have invested the money in
purchasing the sites.
10. Having heard the learned counsel appearing for the
respective parties and also on perusal of the grounds urged in
the revision petition as well as also the documents placed before
the Court, the point that would arise for the consideration of this
Court that:
Whether the Trial Court has committed an
error in dismissing the application filed under
Order VII Rule 11(a) and (d) of CPC?
11. Having perused the material on record it is not in
dispute that the plaintiffs have filed an application before
disposal of the matter in O.S.No.360/2012 and the same was
numbered as I.A.No.10 wherein also set out the ground invoking
Order XXIII Rule 3(a) of CPC and the same was dismissed by the
Trial Court in coming to the conclusion that no prima facie
reason is shown to establish that the agreement through
compromise is by misrepresentation, fraud or mistake and they
were made to agree such compromise being the parties to the
said compromise and comes to the conclusion that there is no
merit in the application. Being aggrieved by the said order, writ
petition was filed and the same was numbered as
W.P.No.50638/2019 and this Court having considered the
grounds urged in the petition comes to the conclusion that the
very revision petitioners made the application before the Trial
Court and they have to workout their remedy elsewhere by filing
an appropriate suit for challenging the subject compromise
decree on the grounds that would void a contract, on which,
such a decree is founded, or on any other ground. Hence, the
suit is filed and the same is numbered as O.S.No.731/2019. It is
settled law that if an application is filed under Order VII Rule 11,
the Court has to look into the averments of the plaint and not
the defence of the defendant since the defence is immaterial.
12. On perusal of the plaint wherein it is stated with
regard to earlier suit in O.S.No.360/2012 and the relief is sought
for the declaration that the GAP executed by the plaintiffs and
their brother K T Venkata Giri which is registered as document
No.1320 of 1992-93 dated 17.03.1993 is unenforceable as it is
cancelled and also for permanent injunction. The copy of the
plaint also produced. It is their case that the plaintiffs are the
directors of defendant No.1 society from 2013 to 2018. It is also
their case that a compromise was entered between the parties
deleting defendant No.1 i.e., between the plaintiffs and the
society in the said suit. The very contention of the plaintiff in
the said suit is that the said compromise was entered against the
interest of the society and in paragraphs 12 and 14 it is stated
that the plaintiffs herein are the duly elected directors of
defendant No.1 society and the election held during the month of
August 2013 and the committee of management consisted of 15
directors apart from the plaintiff herein. It is contended that
proposal for entering into compromise in the above case was not
brought to the plaintiff's notice and there is no proper resolution
and the defendants also not depicts the fact that they are also
the directors who have been elected and in the plaint, in
paragraph 11, contended that fraudulent and illegal
understanding between defendant Nos.2 to 9 and defendant
No.1 society will adversely affect the interest of the plaintiffs
herein and the members of the society. It is contended that by
entering into compromise, the liability to the tune of
Rs.6,40,00,000/- is fastened illegally on defendant No.1 society
which has to be paid in favour of defendant Nos.2 to 9 and a
malafide understanding of defendant No.1 society is vitiated by
fraud.
13. Having perused the plaint averments it is clear that
the compromise was entered in the year 2017 and at that point
of time, the plaintiffs were also directors of the society and it is
also the contention that in view of the compromise, there was a
burden on the society to pay Rs.6,40,00,000/- but the said
compromise was not in the interest of society. In paragraph 16,
it is contended that in collusion with defendant Nos.2 to 9,
defendant No.1 was deleted and having perused the material on
record it discloses that they claim that they are the directors and
members of the society and no doubt, compromise was entered
between defendant Nos.2 to 9 and the society in the present
suit. The averments of the plaint is clear that under what
circumstances, the compromise came into existence. In
paragraph 33 and 34 it is specifically mentioned that cause of
action to the suit was arose on 13.11.2019 when this Court
reserved the liberty to the plaintiffs to file the suit and cause of
action arose for the suit at Nelamangala. When fraudulent
compromise decree was entered into by defendant No.1 with
defendant Nos.2 to 9 on 22.06.2017 by that time the plaintiffs
are the directors of the society and that is also a disputed
question of fact. The revision petitioners claim that the
compromise was entered based on the resolution and the said
fact cannot be decided in an application filed under Order VII
Rule 11 of CPC and the Court also cannot look into the defence
of the defendants which is immaterial and the Court has to look
into the averments of the plaint. Hence, the very contention
that there is no cause of action to file the suit cannot be
accepted.
14. The principles laid down in the case of SREE SURYA
DEVELOPERS AND PROMOTERS is not in dispute wherein the
Court held that the plaint can be rejected on ground of barred by
law, clever drafting held would not permit the plaintiff to make
suit maintainable which otherwise would not be maintainable and
/ or barred by law when clever drafting of plaint has created
illusion of a cause of action, Court will nip it in the bud at the
earliest so that bogus litigation will end at earlier stage and also
held that the suit is not maintainable in view of Order XXIII Rule
3(a) of CPC on the ground that it is not lawful, substantive
independent suit questioning compromise decree not
maintainable to challenge consent decree on ground that it is not
lawful, reiterated, party to such decree has to approach the
same Court, which recorded compromise based on which the
consent decree in question was issued. The other judgment
which has been relied upon by the petitioners' counsel is that
TRILOKINATH SINGH's case and in the said judgment in
paragraph 16 it is held that the Court cannot direct the parties to
file a separate suit and the suit will be barred in view of the
provisions of Order XXIII Rule 3(a) of CPC and the Apex Court
held that independent suit filed by the stranger to compromise
challenging lawfulness of compromise decree, separate suit is
not maintainable questioning lawfulness of compromise must
approach the same Court which recorded the compromise and
law is clarified but in the case on hand, averment made in the
plaint is very clear that they are the directors during the period
of compromise and also it is important to note that earlier suit in
O.S.No.360/2012 was filed against the society and the President
was made as defendant No.1 but while compromising, defendant
No.1 was deleted and society directly entered into the
compromise. It is rightly pointed out by the respondents that in
the said suit, whether the issue with regard to execution of GPA
is enforceable or not but compromise was entered and
accordingly, defendant No.1 society is liable to pay an amount of
Rs.6,40,00,000/- hence, the burden is on the society.
Admittedly, the plaintiffs are the directors of the society during
the period of compromise entered between the parties. When
such averments are found in the plaint, they cannot be termed
as strangers. Hence, the principles laid down in the judgment of
TRILOKINATH SINGH's case is not applicable to the facts of
the case on hand since they are not the strangers. It is also
noticed that compromise terms are contrary to the relief sought
in the earlier suit and when such contention is taken by the
plaintiffs, the Court has to look into the plaint averments and not
the defence of the defendants.
15. The other contention of the petitioners that the suit
is barred. The Trial Court has given the reason that already
application was filed under Order XXIII Rule 3(a) of CPC and the
same was challenged before this Court in writ petition wherein
liberty was also given to the petitioners and the same is also set
down in paragraph 33 of the suit regarding cause of action. It
has to be noted that when liberty was given and these
petitioners were also parties to the said writ petition and the
same has not been challenged and the order also attained its
finality, now, they cannot contend that no such liberty was
given. On perusal of the order of the High Court and also in the
order of the Trial Court particularly in paragraph 17, it has been
discussed with regard to the bar is concerned under Order XXIII
Rule 3(a) and the plaint averments is clear and the same cannot
be distinguished in view of the judgment of the Apex Court
which have been referred by the petitioners herein and hence, I
do not find any error committed by the Trial Court in rejecting
the application and the matter requires trial and disputed
question between the plaintiff and the defendant needs trial and
the same has to be considered only after the trial and suit
cannot be thrown at the threshold in coming to the conclusion
that there is no cause of action and also suit is barred by
limitation.
16. No doubt, in SREE SURYA DEVELOPERS AND
PROMOTERS's case, the Apex Court held that by clever drafting
held would not permit the plaintiff to make suit maintainable
which otherwise would not be maintainable and / or barred by
law when clever drafting of plaint has created illusion of a cause
of action, Court will nip it in the bud at the earliest so that bogus
litigation will end at earlier stage. Having perused the averments
made in the plaint and going through the entire averments and
material, I do not find any such circumstances that it is only a
clever drafting since specific grounds are urged in the plaint that
the plaintiffs are the directors of the society at the time of
compromise and also contended that no resolution was passed
to enter such compromise and payment is also Rs.6,40,00,000/-
and contention is that in view of the said compromise, it burdens
the society at large and the members of the society will also
affected in view of the said compromise. It is noticed that
defendant No.1 in the said suit while entering into compromise
was got deleted and compromise entered between the plaintiff
and society and hence, it requires a trial. In view of the
pleadings set down in the plaint narrating the facts under what
circumstances, the compromise was entered into and whether it
amounts enrichment of the plaintiffs and there was a challenge
filing an application and the same was rejected and the same
was challenged in the writ petition and already liberty was given
in the writ petition to file a separate suit in paragraph 4 of the
order and the petitioners herein contended in the writ petition
that the plaintiffs have to workout their remedy elsewhere and
hence, an observation is made that the plaintiffs have to workout
their remedy by filing an appropriate suit challenging the said
compromise decree on the ground that would void contract, on
which, such a decree is founded, or on any other ground and the
said order is also passed at the instance of the petitioners
herein, when they have raised the ground that they have to
workout their remedy elsewhere and liberty was given and now
they cannot contend that no cause of action and suit is barred by
law. Hence, I answer the point as negative.
17. In view of the discussions made above, I pass the
following:
ORDER
The revision petition is dismissed.
Sd/-
JUDGE
SN
