Kerala High Court
The Meenachil Rubber Marketing And ... vs The Kadaplamattom Service ... on 21 February, 2025
Author: Sathish Ninan
Bench: Sathish Ninan
2025:KER:14777
IN THE HIGH COURT OF KERALA AT ERNAKULAM
C. R.
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN
FRIDAY, THE 21ST DAY OF FEBRUARY 2025 / 2ND PHALGUNA, 1946
FAO NO. 93 OF 2023
AGAINST THE COMMON ORDER DATED 10.07.2023 IN EA 5/2022,
EA 6/22 AND EA 7/22 IN EP 28/2019 IN ARC NO.1030 OF 2016 OF
SUB COURT, PALA
-----
APPELLANT/PETITIONER:
THE MEENACHIL RUBBER MARKETING AND PROCESSING CO-
OPERATIVE SOCIETY LTD NO.K-118
REPRESENTED BY ITS MANAGING DIRECTOR IN CHARGE, PALA,
KOTTAYAM DISTRICT, PIN - 686572.
BY ADVS.
SHAJI THOMAS
MOHAN PULIKKAL
JEN JAISON
RESPONDENT/RESPONDENT:
THE KADAPLAMATTOM SERVICE CO-OPERATIVE BANK LTD.
REPRESENTED BY ITS SECRETARY, KADAPLAMATTOM P.O.,
KOTTAYAM DISTRICT, PIN - 686571
BY ADVS.
PANICKER V.P.K.
SAJEEVU MATHEW
THIS FIRST APPEAL FROM ORDERS HAVING COME UP FOR HEARING ON
21.02.2025, ALONG WITH FAO Nos.25/2024, 26/2024, THE COURT ON THE
SAME DAY DELIVERED THE FOLLOWING:
2025:KER:14777
IN THE HIGH COURT OF KERALA AT ERNAKULAM C. R.
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN
FRIDAY, THE 21ST DAY OF FEBRUARY 2025 / 2ND PHALGUNA, 1946
FAO NO. 25 OF 2024
AGAINST THE COMMON ORDER DATED 10.07.2023 IN EA 5/2022,
EA 6/22 AND EA 7/22 IN EP 28/2019 IN ARC NO.1030 OF 2016 OF
SUB COURT, PALA
-----
APPELLANT/PETITIONER:
CHENGALAM SERVICE CO-OPERATIVE BANK LTD,
CHENGALAM SERVICE CO-OPERATIVE BANK LTD, NO. K 253,
CHENGALAM EAST P.O., CHENGALAM, KOTTAYAM DISTRICT
REPRESENTED BY THE SECRETARY IN CHARGE, CICILY C.S.,
PIN - 686585.
BY ADVS.
ABRAHAM GEORGE JACOB
P.I.RAHEENA
SHAHNA
RESPONDENTS/RESPONDENTS:
1 KADAPLAMATTOM SERVICE CO-OPERATIVE BANK LTD.
KADAPLAMATTOM SERVICE CO-OPERATIVE BANK LTD, NO. 2633,
KADAPLAMATTOM P.O., KOTTAYAM DISTRICT, REPRESENTED BY
ITS SECRETARY, PIN - 686571.
2025:KER:14777
FAO NO. 25 OF 2024 -2-
2 MEENACHIL RUBBER MARKETING AND PROCESSING CO-OPERATIVE
SOCIETY LTD.,
MEENACHIL RUBBER MARKETING AND PROCESSING CO-OPERATIVE
SOCIETY LTD., NO. K 118, MARKET ROAD, PALA, KOTTAYAM
DISTRICT, REPRESENTED BY ITS MANAGING DIRECTOR,
PIN - 686575.
BY ADV PANICKER V.P.K. - R1
ADV SHAJI THOMAS - R2
THIS FIRST APPEAL FROM ORDERS HAVING COME UP FOR HEARING ON
21.02.2025, ALONG WITH FAO.93/2023 AND CONNECTED CASES, THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:14777
IN THE HIGH COURT OF KERALA AT ERNAKULAM C. R.
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN
FRIDAY, THE 21ST DAY OF FEBRUARY 2025 / 2ND PHALGUNA, 1946
FAO NO. 26 OF 2024
AGAINST THE COMMON ORDER DATED 10.07.2023 IN EA 5/2022,
EA 6/22 AND EA 7/22 IN EP 28/2019 IN ARC NO.1030 OF 2016 OF
SUB COURT, PALA
-----
APPELLANT/PETITIONER:
VAYALA SERVICE CO-OPERATIVE BANK LTD.
NO. 2175, VAYALA P.O., KOTTAYAM DISTRICT, REPRESENTED
BY ITS SECRETARY, PIN - 686587.
BY ADVS.
ABRAHAM GEORGE JACOB
P.I.RAHEENA
SHAHNA
RESPONDENTS/RESPONDENTS:
1 KADAPLAMATTOM SERVICE CO-OPERATIVE BANK LTD.,
NO. 2633, KADAPLAMATTOM P.O., KOTTAYAM DISTRICT ,
REPRESENTED BY ITS SECRETARY, PIN - 686571.
2 MEENACHIL RUBBER MARKETING AND PROCESSING CO-OPERATIVE
SOCIETY LTD.
NO. K 118, MARKET ROAD, PALA, KOTTAYAM DISTRICT,
REPRESENTED BY ITS MANAGING DIRECTOR, PIN - 686575.
2025:KER:14777
FAO NO. 26 OF 2024 -2-
BY ADVS.
PANICKER V.P.K.
SAJEEVU MATHEW
RENU.K.MANI
THIS FIRST APPEAL FROM ORDERS HAVING COME UP FOR HEARING ON
21.02.2025, ALONG WITH FAO.93/2023 AND CONNECTED CASES, THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:14777
SATHISH NINAN &
SHOBA ANNAMMA EAPEN, JJ. C. R.
= = = = = = = = = = = = = = = = = =
F.A.O. Nos.93 of 2023, 25 & 26 of 2024
= = = = = = = = = = = = = = = = = =
Dated this the 21st day of February, 2025
J U D G M E N T
Sathish Ninan, J.
These First Appeals from Orders arise from the
dismissal of applications to set aside sale, filed under
Order XXI Rule 90 of the Code of Civil Procedure (CPC).
2. FAO 93/2023 arises from EA 5/2022, which was
filed by the judgment debtor; FAO 25/2024 arises from EA
7/2022, filed by a third party; and FAO 26/2024 arises
from EA 6/2022, also filed by a third party. The
respective petitioners are in appeal.
3. The property involved in these proceedings is 4
acres and 14 cents, (hereinafter referred to as "the
property"). The first respondent in all these
proceedings is the decree holder-auction purchaser.
4. The decree holders secured an award against the
judgment debtor in ARC 1030/2016 filed under Section 69
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
of the Kerala Co-operative Societies Act. The award was
passed on 30.03.2019 for Rs. 2,33,42,751/-.
5. The award holder/decree holder filed EP 28/2019
before the Subordinate Judge's Court, Pala, seeking
execution of the award as enabled under Section 76(a) of
the Act. In Execution, the property was purchased by the
decree-holder on 05.07.2022.
6. On 01.09.2022, the respective appellants filed
applications under Order XXI Rule 90 CPC seeking to set
aside the sale. The grounds alleged were: -
(a) Lack of jurisdiction of the execution court for
non-compliance with the requirements under Section 76(a)
and Rule 72 of the Co-operative Societies Act and Rules
(hereinafter referred to as "Act" and "Rules").
(b) Non-compliance with the prescriptions under
Order XXI Rule 67 CPC.
(c) Non-application of mind by the court in fixing
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
the upset price.
The execution court overruled the objections and
dismissed the applications.
7. We have heard Sri.Abraham George Jacob, the
learned counsel for the appellant, Sri.Shaji Thomas, the
learned counsel for the first respondent and
Sri.V.P.K.Panicker, the learned counsel for the second
respondent. On our request, Sri.P.P.Thajudheen, the
learned special Government Pleader (Co-operative
Societies) also addressed us.
8. Elaborating on the three grounds of challenge
against the execution sale, the learned counsel for the
appellant submits that Section 76(a) and Rule 72 (2) of
the Act and Rules mandates obtaining of a certificate
from the Registrar to enable the award holder to execute
the award before the Civil Court. The certificate is
issued in Form 12 to Appendix II to the Rules. It is the
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
issuance of such a certificate that makes the award a
deemed decree, making it liable to execution in the
civil court. In the case at hand, such certificate in
Form 12 was not obtained and produced by the award
holder before the execution court. Hence the execution
court lacked inherent jurisdiction to execute the award.
Therefore, the entire sale proceedings are without
jurisdiction and void. Referring to Order XXI Rule 67
CPC, the learned counsel for the appellant submits that
paper publication of the sale proclamation as mandated
in the Rules was not effected. This amounts to material
irregularity in the publishing and conduct of sale. This
has resulted in the sale of the property for a much
lower value than it is to fetch. This has resulted in
substantial injury.
9. It is next contended by the appellant that
though the property contained a factory building and
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
other improvements, they were not valued and shown in
the proclamation. This amounts to violation of the
requirements under Order XXI Rule 66 CPC and material
irregularity in the publishing and conduct of the sale
affecting the sale price and thus resulting in
substantial injury.
10. The learned counsel for the award holder/
auction purchaser would on the other hand submit that
the contention with regard to lack of jurisdiction is
not one that is available in an application under Order
XXI Rule 90 CPC. He has also pointed out that a Form-12
certificate from the Registrar was obtained pending the
proceedings to set aside the sale and was produced
before the execution court. Thus, the defect if any, has
been cured. Referring to Order XXI Rule 67 CPC, the
learned counsel submitted that, as is evident from the
Rule, paper publication is not mandatory but needs to be
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
ordered only when the court forms such an opinion. With
regard to the non-mentioning of the factory and
improvements in the proclamation, the learned counsel
submits that a report of the valuer/engineer was
obtained prior to the setting of the proclamation, and
the said value is also included in the upset price
fixed. Therefore, there is no force in the contention of
the appellants. He further points out that there was no
objection to the draft proclamation. He prays for the
dismissal of the appeals.
11. Objection with regard to inherent lack of
jurisdiction is available to a party at any stage of a
proceeding. Unlike an objection to a territorial or
pecuniary jurisdiction, inherent lack of jurisdiction
renders the proceedings before the forum void. Inherent
lack of jurisdiction renders the proceedings void is too
well settled. [Chandrika Misir v. Bhaiyalal 1973 (2) SCC 474, Budhia Swain
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
& Ors. v. Gopinath Deb & Ors. 1999 (4) SCC 396, H.V.Nirmala v. Karnataka State
Financial Corporation & Ors.2008 (7) SCC 639, Shyam Madan Mohan Ruia & Ors. v.
Messer Holdings Ltd. & Ors. 2020 (5) SCC 252]. It is open for a party
to point out at any stage that a court lacked inherent
jurisdiction. Even acquiescence or consent cannot confer
jurisdiction if there is inherent lack of jurisdiction
[See United Commercial Bank Ltd and Ors v. Their Workmen (AIR 1951 SC 230),
Bahrein Petroleum Co. Ltd v. P.J Pappu and Anr (AIR 1966 SC 634), Smt Nai Bahu
v. Lala Ramnarayan and Ors (AIR 1978 SC 22)]. A plea of inherent lack
of jurisdiction could be taken at any stage of the
proceedings or even in collateral proceedings [See Kiran
Singh and Ors v. Chaman Paswan and Ors (AIR 1954 SC 340), Sarup Singh and Ors
v. Union of India and Ors (AIR 2011 SC 514) ]. Merely because the
applications were filed under Order XXI Rule 90 CPC does
not prevent the party from pointing out to the court
that the entire sale proceedings were void for inherent
lack of jurisdiction. Incidentally it is also to be
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
noticed that, the petitioners in EA Nos.6/22 and 7/22
were not parties to the proceedings enabling them to
raise such a contention.
12. Now we proceed to consider the contention that,
the failure to obtain Form-12 certificate from the
Registrar renders the execution proceedings void for
inherent lack of jurisdiction.
13. Section 100 of the Act bars the jurisdiction of
civil courts in respect of any matter for which
provision is made under the Act. The Section reads
thus :-
"100. Bar of jurisdiction of courts: - No civil or revenue court shall have
any jurisdiction in respect of any matter for which provision is made in
this Act."
Section 69 of the Act provides a mechanism for
settlement of disputes. The Act also provides a
mechanism for execution/enforcement of the award.
Therefore, unless the Act specifically confers
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
jurisdiction, the civil court lacks jurisdiction.
14. Section 76(a) of the Act and Rule 72(1) and (2)
of the Rules, read thus :-
"76. Execution of orders, etc.:⸺ Every order made under sub-section
(2) of Section 68 or under Section 75 every decision or award made
under Section 70, every order made by the liquidator under Section 73
and every order made by the Tribunal under Section 82, Section 84,
Section 85 or Section 86 and every order made under Section 83 shall, if
not carried out--
(a) on a certificate signed by the Registrar or any person
authorised by him in this behalf, be deemed to be a decree of a civil court
and shall be executed in the same manner as a decree of such court."
"72. Issue of certificate under Section 76:⸺(1) The holder of any
decision, award or order referred to in Section 76 of the Act shall, if the
said decision, award or order is not carried out, apply to the Registrar
for the execution thereof under clause (c) of Section 76 or for a certificate
to be issued under clause (a) or (b) of the said section :
(2) The Registrar may, on receipt of an application under clause
(1) above for the issue of a certificate, issue the certificate, only on his
satisfying that no such certificate has been issued to the party to enable
him to apply for execution either to the Collector or a civil court of
competent jurisdiction, previously.
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
Section 76(a) of the Act enables an award under Section
70 of the Act to be executed by a civil court. But for
such an enabling provision, the civil court would not
have jurisdiction to execute the award. Section 76(a)
provides that on a certificate issued by the Registrar,
the award is deemed to be the decree of a civil court,
liable to execution by a civil court. By a statutory
fiction, an award is deemed to be a decree of a civil
court when the Registrar issues a certificate under Rule
72 of the Rules. It is upon the issuance of the
certificate by a Registrar that the fiction operates,
and the award is deemed to be a decree of the civil
court. Till the issuance of the certificate, an award
remains as such, and the civil court cannot execute the
award. The issuance of such a certificate is a pre-
requisite to vest in the award the status of a deemed
decree. In T.C.Balakrishnan Nair v. Secretary, Naruvammoodu Co-operative
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
Bank (CRPNo.656 of 2009), a learned single judge of this Court
held,
"On a plain reading of the provision of the Act and Rules it is abundantly
clear that certification by the Registrar is a sine qua non for the order or
award to get the fictional status of a decree."
On the discussions made by us supra, we concur with the
view. Thus, we hold that the issuance of a certificate
by the Registrar in terms of Rule 72 is mandatory for an
award to partake the status of a deemed decree liable to
be executed before a civil court. Unless such a
certificate is issued, the civil court lacks
jurisdiction to execute the award.
15. In the present case, admittedly the certificate
of the Registrar was not obtained when the execution
petition was filed or even when the sale was held on
05.07.2022. Therefore, there was no decree/deemed decree
liable to be executed by the civil court. The award-
holder was merely seeking for execution of an award
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
under the Act. There was inherent lack of jurisdiction
with the civil court to execute the award. It is without
noticing the same that the civil court proceeded with
the execution.
16. While it is true that pending the applications
to set aside the sale the award holder had obtained the
certificate under Rule 72 and produced the same before
the execution court, it could not save the proceedings
already held by the Court since there was inherent lack
of jurisdiction. The obtaining of the certificate
subsequently could not cure the defect of lack of
jurisdiction, retrospectively. Therefore, the obtaining
and production of a certificate after the sale in the
present case cannot validate the proceedings till then.
We are unable to agree with the execution court, which
held to the contrary.
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
17. On the above discussions we hold that,
consequent on the non-obtaining of the certificate of
the Registrar under Rule 72, the civil court lacked
inherent jurisdiction to execute the award in question
and the execution sale held in the instant case is null
and void. It is declared accordingly.
18. It is argued on behalf of the appellants that
there has been non-compliance with the prescription
under Order XXI Rule 67 CPC which mandates paper
publication of the proclamation of sale. While it is
true that the proclamation of the sale was not published
in the newspaper, such publication is necessary only in
cases where the court so directs. Rules 67(1) and (2)
being relevant are extracted hereunder :-
"67. Mode of publishing the proclamation of sale.-(1) Every
proclamation shall be published, as nearly as may be, in the manner
prescribed by rule 54, sub-rule (2).
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
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(2) Where the Court so directs, such proclamation shall also be
published in the Official Gazette or in a local newspaper, or in both, and
the costs of such publication shall be deemed to be costs of the sale."
In terms of Rule 67(1) the proclamation is to be
published in the manner prescribed in Rule 54(2). Rule
54(2) provides for proclamation at the property, court
house etc. As per Rule 67(2), it is only when the court
so directs that such a proclamation needs to be
published in the newspaper. It is not in dispute that,
in the present case, there was no such order. In Saheb
Khan v. Mohd. Yousufuddin and Ors (2006 KHC 612), this Court held
that paper publication is not the rule but the
exception. Hence, the allegation that there has been
non-compliance with the requirements under Rule XXI
Order 67 CPC is only to be repelled, and we do so.
19. It is next contended by the appellants that,
there has been material irregularity in the sale
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
proceedings since the sale proclamation did not mention
the value of the factory building situated in the
property. So also, the fixation of the upset price was
not proper. The court relied on a fair value
notification by the Department of Registration, which
was revised and was not in force at the relevant time.
This reflects the non-application of mind by the Court,
rendering the settlement of the proclamation void. Such
fixation of upset price has resulted in substantial
injury to the applicants, is the contention.
20. A perusal of the proclamation shows that the
Court fixed a total value of ₹1,50,00,000/- for the
land, the building, and the machinery thereon. For the
land, the value was fixed at the rate of ₹68,062.50 per
Are. A perusal of the sale proclamation reveals that,
though it mentioned the factory building and other
buildings on the property, separate value of the factory
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
with the machinery is not shown. However, from the
details as above, the value of the factory etc., is
easily deducible. Therefore, the non-mentioning of the
separate value in the proclamation may not be of much
significance.
21. Now, coming to the value fixed for the factory
and machinery, the total value of the land at the rate
of ₹ 68,062.50 per Are is ₹ 1,13,66,220/-. Deducting the
same from the total value of ₹ 1,50,00,000/- the value
of the building and machinery is seen fixed at
₹ 36,33,780/-. There is no material to find how the
court had fixed the value of the factory building and
machinery, in the proclamation. The learned counsel for
the award holder-auction purchaser contends that the
award holder had obtained a valuation report through an
approved valuer. A perusal of the said valuation report
shows that it was obtained on 27.06.2022, i.e. after the
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
settling of the proclamation on 15.06.2022. Further, as
per the report, the value of the buildings in the
property, including the factory building, is
₹ 2,14,24,000/-. The value of the factory building alone
is ₹1,70,84,000/-. Evidently, the value of the buildings
shown in the proclamation schedule is too low.
22. So also, coming to the value of the land, as
noticed above, the court has fixed the value at
₹ 68,062.50 per Are relying on a fair value notification
which was not in force. The applicants have produced the
fair value notified by the Registration Department in
the year 2010. As per the same, the fair value is
₹ 82,500/- per Are. The total extent of property
involved is 4 acres and 14 cents. Therefore, there would
be much disparity in the total value of the property.
23. The learned counsel for the award holder would
contend that, as is evident from the proclamation, there
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
are subsisting liabilities to the Government amounting
to ₹ 1,49,25,000/- and if that is also taken into
account the total value would be ₹ 1,50,00,000/- +
₹ 1,49,25,000/- = ₹2,99,25,000/- which is at par with
the fair value of the year 2010 relied on by the
appellants. The said contention has no force since, as
noticed above, not only is there a disparity in the land
value, but the value of the factory building and
machinery, as included in the proclamation, is also too
low even going by the valuation report relied on by the
award holder.
24. Apart from the award holder, the applicants in
EA 6/2022 and EA 7/2022 are also award holders against
the very same judgment debtor. As per the awards held by
them in ARC Nos.24/2017 and 2923/2017 an amount of
₹ 3,28,20,496/- and ₹ 1,07,28,226/- are due to the
respective applicants. Now the award-holder has
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
purchased the property. According to the appellants-
petitioners, there are various other creditors for the
judgment debtor. Evidently, if a proper sale is
conducted there will be competitive bidding. Now the
award holder has bid the property for its debt. The
substantial injury that has resulted to the applicants
consequent on the irregularity in the settling of the
proclamation and conducting the sale, need no further
material. In Regi George v. Bhaskaran Nair (1998 (2) KLT 640) it was
held that when the sale is for an inadequate price the
corollary is substantial injury [See also Thankamma v. Leelamma
Abraham (2008 (2) KHC 109), Babu John v. A. K. Ramakrishnan and Another (2016
(2) KHC 515)] The material irregularity in the conduct of
the sale and the resultant substantial injury are writ
large. Therefore, the sale is liable to be set aside.
For the reasons stated above, we are unable to concur
with the order of the execution court upholding the
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
sale.
25. Though a contention is raised with regard to
the locus of the petitioners in EA 6/22 and EA 7/2022 to
maintain the application, as is evident from Order XXI
Rule 90 CPC, any person entitled to seek for rateable
distribution of the assets of the judgment debtor is
entitled to maintain the application. In the oral
evidence of the applicants, it has been deposed that
they hold awards against the judgment debtor, which are
under execution. The depositions remain unchallenged.
They are entitled to rateable distribution and hence
have the locus to maintain the applications. The said
ground of challenge is thus rejected.
26. We have already held supra that the execution
proceedings which resulted in sale, were without
jurisdiction. Hence the execution petition as such is
liable to be dismissed. Since the award holder has since
F.A.O. Nos.93 of 2023, 25 &
26 of 2024
2025:KER:14777
obtained a certificate as mandated under Section 76(a)
and the Rule 72 of the Act and the Rules, it shall be
open for the award holder to initiate fresh proceedings
for execution.
Resultantly, the appeals are allowed. The sale held
on 05.07.2022 is set aside. The execution petition will
stand dismissed, but without prejudice to the rights of
the award holder. No costs.
Sd/-
SATHISH NINAN
JUDGE
Sd/-
SHOBA ANNAMMA EAPEN
JUDGE
kns/-
//True Copy//
P.S. To Judge
