Thomas T.J. v The Thrissur District Co-Operative Bank Ltd (WP(C).No.11151 of 2009 (L) and WP(C).No.1180 of 2010)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **THURSDAY, THE 3RD DAY OF DECEMBER 2020 / 12TH AGRAHAYANA, 1942** ## **WP(C).No.11151 OF 2009(L)** ## **PETITIONER:** ## **THOMAS.T.J., S/O OUSEPH, THARAYIL HOUSE, KARIYANNUR VILLAGE, THALAPPILLY TALUK, TRISSUR.** **BY ADVS. SRI.ANIL K.NAIR SRI.DIPU.R SRI.K.S.HARIDAS SMT.MERCIAMMA MATHEW SRI.V.RENJITH KUMAR SRI.ASWIN.P.JOHN** ## **RESPONDENTS:** - **1 THE TRISSUR DISTRICT CO-OPERTIVE BANK LTD., ERUMAPPETTY BRANCH, REPRESENTED BY ITS SECRETARY, ERUMAPPETTY, TRISSUR- 680022.** - **2 THE SPECIAL SALE OFFICER, TRISSUR DISTRICT CO-OPERATIVE BANK, HEAD OFFICE, TRISSUR- 680001.** - **3 JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, TRISSUR- 680001.** - **4 A.V.SUBHASH, PARIYANGAD ANGOTHU VEEDU, MARATHUKUNNU, VADAKKANCHERRY, TRISSUR- 680023.** ## *** ADDL. RESPONDENT NOS.5 & 6** **KERALA STATE CO-OPERATIVE BANK LIMITED, ADDL. R5 REPRESENTED BY ITS MANAGING DIRECTOR PR NO.6515, CO-BANK TOWERS, PALAYAM, THIRUVANANTHAPURAM-695033.** **WP(C).No.11151 OF 2009(L) -2-** **KERALA STATE CO-OPERATIVE BANK LTD., ADDL. R6 (ERSTWHILE THRISSUR DISTRICT CO-OPERATIVE BANK), THRISSUR REGIONAL BRANCH, REGIONAL OFFICE, SAHAKARNA SATHABDHI MANDIRAM, KOVILAKATHUMPADAM.P.O., THIRUVAMBADI, THRISSUR680022, REPRESENTED BY ITS REGIONAL MANAGR.** ***(ADDITIONAL RESPONDENTS 5 AND 6 ARE IMPLEADED AS PER ORDER DATED 13-11-2020 IN IA NO. 1/2020 IN WP(C) 11151/2009).** **R1 BY GOVERNMENT PLEADER SMT.MABLE C. KURIAN R1 BY ADV. SRI.P.C.SASIDHARAN R1 BY ADV. SRI.P.C.SASIDHARAN, SC, TSSR DIST.CO.OP.BANK R1 BY SRI.C.A.MAJEED, SC, THRISSUR DISTRICT - CO.OP. BANK R4 BY ADV. SHRI.ESM.KABEER** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02.12.2020, ALONG WITH WP(C).1180/2010(V), THE COURT ON 03.12.2020 DELIVERED THE FOLLOWING:** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **THURSDAY, THE 3RD DAY OF DECEMBER 2020 / 12TH AGRAHAYANA, 1942** ## **WP(C).No.1180 OF 2010** ## **PETITIONERS:** - **1 T.J.THOMAS, S/O.OUSEPH, THARAYIL HOUSE, NELLUVAI PO, THRISSUR 680 584** - **2 REETHA W/O. T.J.THOMAS, THARAYIL HOUSE, NELLUVAI PO, THRISSUR 680 584** - **3 REMYA, D/O. T.J.THOMAS NELLUVAI PO, THRISSUR 680 584** **BY ADVS. SRI.ANIL K.NAIR SRI.DIPU.R SRI.K.S.HARIDAS SMT.MERCIAMMA MATHEW SRI.V.RENJITH KUMAR SRI.ASWIN.P.JOHN** ## **RESPONDENTS:** - **1 GENERAL MANAGER, THE THRISSUR DISTRICT CO-OPERATIVE BANK LTD NO.60, TRISSUR 680001.** - **2 THE SPECIAL SALE OFFICER THRISSUR DISTRICT CO-OPERATIVE BANK,HEAD OFFICE, TRISSUR.** - **3 JOINT REGISTRAR OF CO-OPERATIVE SOCIETEIS, OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, TRISSUR.** - **4 A.V.SUBHASH PARIYANGAD ANGOTHU VEEDU, MARATHUKUNNU, ENKAKADU PO, VADAKKANCHERRY, TRISSUR.** ## **5 KERALA CO-OPERATIVE TRIBUNAL THIRUVANANTHAPURAM.** **WP(C).No.1180 OF 2010 -2-** ## *** ADDITIONAL RESPONDENT NOS.6 & 7** **KERALA STATE CO-OPERATIVE BANK LIMITED, ADDL. R6 REPRESENTED BY ITS MANAGING DIRECTOR PR NO.6515, CO-BANK TOWERS, PALAYAM, THIRUVANANTHAPURAM-695033** **KERALA STATE CO-OPERATIVE BANK LTD.,(ERSTWHILE ADDL. R7 THRISSUR DISTRICT CO-OPERATIVE BANK), THRISSUR REGIONAL BRANCH, REGIONAL OFFICE, SAHAKARANA SATHABDHI MANDIRAM, KOVILAKATHUMPADAM P.O, THIRUVAMBADI,THRISSUR-680022, REPRESENTED BY ITS REGIONAL MANAGER.** *** ADDL.R6 AND R7 ARE IMPLEADED AS PER ORDER DATED 13/11/2020 IN IA NO.1/2020 IN WP(C)NO.1180/2010** **R1 BY SRI.P.C.SASIDHARAN, SC, TSSR DIST.CO.OP.BANK R1 BY ADV. SRI.C.A.MAJEED R4 BY ADV. SHRI.ESM.KABEER** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02.12.2020, ALONG WITH WP(C).11151/2009(L), THE COURT ON 03.12.2020 DELIVERED THE FOLLOWING:** **SATHISH NINAN, J. = = = = = = = = = = = = = = = = = = W.P.(C) Nos.11151 of 2009 & 1180 of 2010** **= = = = = = = = = = = = = = = = = = Dated this the 3[rd] day of December, 2020** ## **JUDGMENT** Petitioners avail a credit facility from the respondent Co-operative Bank on the mortgage of 92.134 cents of immovable property (comprised of three items). Consequent on the account becoming irregular and classified NPA, the Bank filed ARC 497/2005 for recovery of the loan. In the ARC, award was passed on 21.11.2005. In execution of the award, the said 92.134 cents of property was sold on 21.08.2008 and was purchased by the 4[th] respondent-auction purchaser for an amount of `32,55,000/-. In W.P.(C) No.11151 of 2009, the execution sale is under challenge. W.P.(C) No.1180 of 2010 arises from the order in R.P. 136/2007 of the Kerala Co-operative Tribunal which was filed against the award in ARC 497/2005. W.P.(C) Nos.11151 of 2009 & 1180 of 2010 -: 2 :- 2. Heard learned counsel on either sides. 3. As regards the challenge in W.P.(C) No.1180 of 2010 is concerned, as noticed, the same relates to challenge against the award. The award in question was passed on an admission made by the first petitioner in his deposition. Award was passed for realisation of the amount outstanding with the agreed rate of interest and charged on the mortgaged property. In view thereof, there is no scope for interference with the award. 4. The sale held on 21.08.2008 is challenged on the ground of violation of Rule 81(h) of the Cooperative Societies Rules. The balance purchase price not having been paid within the time stipulated under Rule 81(h), the sale falls, is the contention. It would be appropriate to refer to Sub-rules (g) and (h) of Rule 81, which deal with deposit of purchase price. _“81 (g) - A sum of money equal to 15% of the price of the immovable property shall be deposited by the purchaser with the sale officer at the time of purchase and in default of such deposit, the property shall forthwith be sold._ W.P.(C) Nos.11151 of 2009 & 1180 of 2010 -: 3 :- - _81 (h) - The remainder of the purchase money and the amount required for the general stamp for the certificate under sub-rule (5) of R.83_ _**shall be paid** within 15 days from the date of sale.”_ 5. In terms of sub-rule(g), 15% of the purchase price is to be deposited at the time of purchase. In terms of sub-rule (h), the balance purchase price with the amount required for the stamp paper for the certificate of purchase shall be paid within 15 days from the date of sale. 15% of the purchase price was paid by the 4[th] respondentauction purchaser on the date of sale itself. The sale having been held on 21.08.2008, in terms of Rule 81(h), the balance amount ought to have been paid within 15 days therefrom viz. on or before 05.09.2008. However, the balance purchase price was paid only on 12.01.2009. Pursuant to such payment, the sale was confirmed on 23.03.2009. 6. Rule 81(i) provides that in case of default in payment of the balance purchase price within a period of 15 days as required under Rule 81(h), the W.P.(C) Nos.11151 of 2009 & 1180 of 2010 -: 4 :- Registrar may if he thinks fit, forfeit the same to the Government after defraying the expenses of the sale. Providing the consequence of non-deposit indicates that the period for payment of the balance purchase price stipulated under Rule 81(h) is mandatory in nature. Rule 83(3) of the Cooperative Societies Rules provides that if no application to set aside sale is made within 30 days from the date of sale, the Registrar shall confirm the sale. The very fact that the period fixed for payment of the balance purchase price is only 15 days from the date of sale and the time provided for filing an application to set aside the sale is 30 days from the date of sale, and that on expiry of the said 30 days the Registrar is to confirm the sale, makes it abundantly clear that the period for payment of the balance purchase price runs from the date of sale and not from the date of confirmation of the sale. Therefore, the contention of the learned counsel for the 4[th] respondent that the balance purchase price need to W.P.(C) Nos.11151 of 2009 & 1180 of 2010 -: 5 :- be paid only after the confirmation of the sale is devoid of merit. 7. The Code of Civil Procedure contains similar provisions with regard to sale of immovable property and the period for payment of the purchase price. Rules 84, 85 and 86 of Order XXI of the Code are relevant. In terms of Order XXI Rule 84, in an execution sale, 25% of the purchase price shall be deposited immediately on sale, by the auction purchaser. As per Rule 85, the balance purchase price shall be paid within 15 days from the date of sale. Rule 86 provides that in case of default in payment within the said period, the deposit may be forfeited to the Government and the property resold. That, compliance with the said provisions are mandatory and default in payment of the balance purchase price within the period as stipulated renders the sale a complete nullity has been declared by the Apex Court in _**Manilal Mohanlal Shah and Ors. v. Sardar Sayed Ahmed Sayed Mahmad and Anr. [AIR 1954 SC 349]**_ . The Apex Court held that, in view of the W.P.(C) Nos.11151 of 2009 & 1180 of 2010 -: 6 :- mandatory provisions, on failure to make the payment as required under the Rules, there is no sale in the eye of law. In _**Gangabai Gopaldas Mohata v. Fulchand and others [AIR 1997 SC 1812]**_ it was held that, on non-compliance with the mandatory provision for deposit of balance purchase within the time prescribed, the sale would stand annulled “ipso jure without anything more”. The same principle applies in the case at hand also. The balance purchase price having not been paid within the time stipulated under the Co-operative Societies Rules, the sale dated 21.08.2008 is a nullity. 8. The learned counsel for the auction purchaser/4[th] respondent though relied on the fact that WP(c) 24863/2008 and WP(c) 26918/2008 filed by the petitioners-award debtors were pending before this Court and that the confirmation of the sale was deferred in WPC 26918/2008, the same is hardly of any avail to the auction purchaser since there were no orders interdicting the deposit of the balance purchase price nor was there any order by W.P.(C) Nos.11151 of 2009 & 1180 of 2010 -: 7 :- this Court extending the time for payment of the balance purchase price. The learned counsel for the auction purchaser as well as the Bank would vehemently contend that several interim orders were passed by this Court in the various rounds of litigation including the present, directing the petitioner to deposit part of the debt, but the petitioner did not comply with the same. The petitioner does not deserve any equitable considerations whereas the auction purchaser does, contends the counsel. When the sale is a nullity or where there is no sale at all in the eye of law, equitable considerations cannot uphold the sale. 9. Though as per order dated 26.12.2008, the Joint Registrar purported to grant permission for payment of the balance purchase price and the balance purchase price was paid on 12.01.2009, the same is of no profit since the Joint Registrar did not have the power to grant such extension of time. As held by the Apex Court in _**Manilal Mohanlal Shah and Ors. v. Sardar Sayed Ahmed Sayed Mahmad and Anr. (supra)** and_ W.P.(C) Nos.11151 of 2009 & 1180 of 2010 -: 8 :- _**Gangabai Gopaldas Mohata v. Fulchand and others (supra)**_ , noncompliance with the mandatory provision for deposit of the balance purchase price within the time stipulated, renders the sale void. Accordingly the sale held on 21.08.2008 is declared a nullity. 10. The sale having been declared a nullity, necessarily, the property is to be reverted/restituted back to the owner. So also, the purchase price paid into the Bank by the 4[th] respondent-auction purchaser is liable to be returned. It is to be noticed that 12 years have elapsed since the date of sale. The Bank having enjoyed the amount these years shall pay interest on the said amount at 6% per annum from 12.01.2009, namely the date of payment of the balance purchase price. The 4[th] respondent shall vacate the property in question and the Bank shall return the entire purchase price paid by him with interest as ordered. The execution proceedings will stand restored and the Bank is at liberty to realise the decree debt/award debt with interest as awarded. Needless to say that W.P.(C) Nos.11151 of 2009 & 1180 of 2010 -: 9 :- the property continues to retain the character of mortgaged property and shall be liable to be proceeded against afresh for realisation of the debt. WP(C) No.11151/2009 is allowed as above and W.P.(C) No.1180/2010 is dismissed. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge ## **APPENDIX OF WP(C) 11151/2009** ## **PETITIONER'S/S EXHIBITS:** |**EXHIBIT P1**|**TRUE COPY OF THE AWARD IN ARC 497/2005.**|| |---|---|---| |**EXHIBIT P2**|**TRUE COPY OF THE SALE NOTICE DATED**|| ||**21.07.2008.**|| |**EXHIBIT P3**|**TRUE**<br>**COPY**<br>**OF**<br>**THE**<br>**JUDGMENT**|**IN**| ||**WP(C)NO.24863/2008.**|| |**EXHIBIT P4**|**TRUE COPY OF THE REQUEST LETTER DATED**|| ||**28.08.2008.**|| |**EXHIBIT P5**|**TRUE COPY OF THE AFFIDAVIT FILED BY**|**THE**| ||**PETITIONER IN W.P(C)NO.26918 STATING**|**THE**| ||**WITHDRAWAL OF THE REVISION PETITION**|| ||**NO.136/2007 DATED 17.09.2009.**|| |**EXHIBIT P6**|**TRUE**<br>**COPY**<br>**OF**<br>**THE**<br>**JUDGMENT**|**IN**| ||**WP(C)NO.26918/2008 DATED 03.11.2008.**|| |**EXHIBIT P7**|**TRUE COPY OF THE RESTORATION PETITION FILED**|| ||**BY THE PETITIONER BEFORE THE TRIBUNAL.**|| |**EXHIBIT P8**|**TRUE COPY OF THE APPLICATION SUBMITTED**|**BY**| ||**THE PETITIONER TO THE 2ND RESPONDENT.**|| |**EXHIBIT P8A**|**TRUE COPY OF THE DOCUMENT PURPORTED TO**|**BE**| ||**THE PROCEEDINGS OF THE SALE OFFICER,**|| ||**EXHIBIT P8(A): THE TRUE COPY OF **|**THE**| ||**DOCUMENT PURPORTED TO BE THE PROCEEDINGS**|**OF**| ||**THE SALE OFFICER.**|| |**EXHIBIT P9**|**TRUE COPY OF THE ORDER PASSED BY THE**|**2ND**| ||**RESPONDENT DATED 23.03.2009.**|| |**EXHIBIT P10**|**TRUE COPY OF THE ORDER DATED 29.05.2009.**|| |**EXHIBIT P11**|**TRUE COPIES OF THE BANK RECEIPT AND**|**THE**| |**COLLECTIVELY**|**POSTAL RECEIPT EVIDENCING THE REMITTANCE.**|| |**EXHIBIT P12 AND**|**TRUE**<br>**COPIES**<br>**OF**<br>**I.A.NO.208/09**|**AND**| |**EXHIBIT P12(A)**|**I.A.NO.209/09, EXHIBIT P12: THE TRUE COPY**|| ||**OF THE PAPERS CONNECTED WITH **|**THE**| ||**PROCEEDINGS IN ARC.NO.497 OF 2005, EXHIBIT**|| ||**P12(A): THE TRUE ENGLISH TRANSLATION**|**OF**| ||**EXHIBIT P12.**|| **APPENDIX OF WP(C) 11151/2009 -2-** **EXHIBIT P13** - **TRUE COPY OF THE BANK RECEIPT DATED 27.04.2009 EVIDENCING THE RECEIPT OF THE PAYMENT OF RS.5 LAKHS, THE TRUE COPY OF THE DOCUMENT ISSUED BY THE SUB REGISTRAR, ERUMAPETTY, EXHIBIT P13(A): THE TRUE ENGLISH TRANSLATION OF EXHIBIT P13.** - **EXHIBIT P14 THE TRUE COPY OF THE ORDER DATED 24.11.2014 ISSUED BY THE JUDICIAL FIRST CLASS MAGISTRATE'S COURT, WADAKKANCHERRY IN C.M.P.NO.323/2012 IN C.C.NO.503/2011.** - **EXHIBIT P15 THE TRUE COPY OF THE DOCUMENTS EVIDENCING THE FUNCTIONING OF THE SAW MILL AND THE FURNITURE SHOP.** - **EXHIBIT P16 THE TRUE COPY OF THE REVISION PETITION NO.136 OF 2007 ON THE FILE OF THE KERALA CO-OPERATIVE TRIBUNAL, THIRUVANANTHAPURAM.** - **EXHIBIT P17 A ROUGH SKETCH SHOWING THE LIE AND OTHER DETAILS OF THE PROPERTIES OF THE PETITIONERS.** - **EXHIBIT P18 THE TRUE COPY OF THE REPORT PUBLISHED IN MALAYALA MANORAMA NEWSPAPER ON 05.05.2013.** - **EXHIBIT P18A THE TRUE ENGLISH TRANSLATION OF EXHIBIT P18 NEWSPAPER REPORT.** - **RESPONDENT'S/S EXHIBITS:** - **EXHIBIT R1 D** - **EXHIBIT R2 D** - **EXHIBIT R3 D** **EXHIBIT R4A TRUE COPY OF THE DELIVERY REPORT ISSUED TO THE PETITIONER ON 14.08.2009 EVIDENCING DELIVERY OF THE PROPERTIES.** **EXHIBIT R4B TRUE COPY OF PROCEEDINGS OF THE SALE OFFICER DATED 26.12.2008.** ----- ## **APPENDIX OF WP(C) 1180/2010** **EXT.P1 THE TRUE COPY OF THE AWARD DATED 21/11/2005 IN ARC 497/05 EXT. P2 THE TRUE COPY OF THE JUDGMENT DATED 03.11.2008 IN WPC 26918 OF 2008 EXT.P3 THE TRUE COPY OF THE INTERIM ORDER DATED 24.04.2009 IN WPC 11151/2009. EXT.P3(a) THE TRUE COPY OF THE CHALAN RECEIPT EVIDENCING THE PAYMENT OF RS.5 LAKHS IN COMPLIANCE WITH EXT.P3 ORDER. EXT.P4 THE TRUE COPY OF THE IA 209/09 DATED 05.08.09. EXT.P5 TRUE COPY OF IA 220/09 IN RP 136/07. EXT.P6 THE TRUE COPY OF THE IA 286/09 IN RP 136/07. EXT.P7 THE TRUE COPY OF IA 287/09 ALONG WITH THE COLLECTIVELY DOCUMENTS ANNEXED. EXT.P8 THE TRUE COPY OF THE ORDER DATED 08.12.09 IN IA 209/09 IN RP 136/07. EXT.P9 THE TRUE COPY OF THE ORDER DATED 08.12.09 IN IA 220/09 IN RP 136/07 EXT.P10 TRUE COPY OF THE ORDER DATED 08.12.09 IN IA 286/09 IN RP 136/07. EXT.P11 TRUE COPY OF THE ORDER DATED 08.12.09 IN IA 287/09 IN RP 136/07** **-----**