W.P.(C).No.13801/2008

**==> picture [433 x 620] intentionally omitted <==** ``` WPC 13801/2008 ``` ## **-:2:-** **==> picture [432 x 609] intentionally omitted <==** ## **A.MUHAMED MUSTAQUE, J.** ## ========================= **W.P.(C).No.13801/2008** ~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 12[th] day of October, 2017 ## **J U D G M E N T** 1. _"A greedy mind knew no blood and an avaricious mind have no_ _bounds"_ is the typical thought that comes to mind in the background of this case. This writ petition is filed challenging a sale of an immovable property in which the petitioner had a half share through a public auction conducted by the third respondent as early as on 6/8/2004. 2. The brief facts to understand the genesis of the dispute are as follows: One Meenakshi Amma was the owner of 5.97 Ares (14.72 cents) in survey number 252/1/1 of Thodupuzha Village. She had two children, namely, Gopalanachary and Shanmughamachary. The petitioner herein is the daughter of Shanmughamachary. The fourth respondent, P.G.Suresh is the son of Gopalanachary. Feeling love and affection to the grandchildren, Meenakshi Amma executed a settlement deed on 26/6/1997 in favour of the petitioner ## **`WPC 13801/2008`** ## **-:2:-** and the fourth respondent. Love seemingly lost for covetous and insidious acts, as unfolded in this case. 3. The fourth respondent approached the Thodupuzha Urban Cooperative Bank for a loan of Rs.50,000/- mortgaging the property covered by the settlement deed. The petitioner stood as a surety. The principal borrower, the fourth respondent committed default. This resulted in filing an arbitration case by the bank, and an award has been passed. The address of the parties in the award as well as for the loan purpose was shown as that of the residential building situated in the mortgaged property. The petitioner claims she never received any notice in the arbitration proceedings. For realisation of the award amount, the bank initiated sale proceedings. As on the date of sale, the amount due to the bank was nearly Rs.25,000/-. The bank sold the entire property in auction to the fifth respondent, who is the wife of the fourth respondent, the principal borrower for an amount of Rs. 25,031/-. 4. The petitioner claims that she came to know about the sale only in January 2007. She approached the second respondent for setting aside the sale. Since the petitioner is unable to secure any relief, ``` WPC 13801/2008 ``` ## **-:3:-** she filed a civil suit as O.S.No.121 of 2007 before the Munsiff's Court, Thodupuzha. According to the petitioner, the suit was dismissed as not-maintainable. This aspect have not been controverted in the counter affidavit filed by the respondents. Thereafter, the petitioner approached this Court with this writ petition seeking a relief to set aside the sale and other reliefs. 5. As revealed from the pleadings, the following facts have to be noted: The date fixed for sale 29/03/2004 Sale was adjourned to 6/08/2004 Auction took place on 6/08/2004 Confirmation was on 8/10/2004 Sale deed was executed in favour of the fifth respondent on 13/10/2004 Mutation of the property was effected on 26/10/2004 6. It is not clear whether any delivery has been effected in this matter. Anyhow, the principal borrower (defaulter) and the auction purchaser being husband and wife, the issue of possession might not have arisen for them. ## **`WPC 13801/2008`** ## **-:4:-** 7. The main ground on which the writ petition is filed challenging sale, on the ground of fraud. Resistance has come from respondents 4 and 5 in this writ petition mainly on the ground that the writ petition is not maintainable as the petitioner is having an alternate remedy in terms of the statutory provision and also on the ground of res judicata. They also put forward a case that the writ petition is not maintainable on the ground of laches as it is filed after a period of more than three years. Perhaps all these issues will have to be considered in this case, including the question of fraud. It is appropriate to decide those issues raised by the party respondents at a later stage as this Court deem fit to consider the question on fraud at the first instance. 8. Invocation of the remedy under Article 226 of the Constitution is often to establish the fundamental right of a citizen or to review the decision taken by the public instrumentalities. This Court seldom exercises its power for deciding a question of disputed fact like the fraud for the obvious reason that the aggrieved will have to work out his remedy in an appropriate forum to adjudicate such issues. The jurisdiction of writ court in entertaining a challenge against ``` WPC 13801/2008 ``` ## **-:5:-** sale conducted by public officials cannot be disputed even though the court may not entertain such challenge when parties have efficacious alternate remedy. The court in such situation is examining only process of sale to find whether on account of abuse of power or unchecked abuse of process in sale, by officials, had resulted in erroneous decision of confirmation of sale or not. However, when fraud can be detected with the naked eyes, nothing bars the Court from entertaining a challenge against sale on the ground of fraud. Therefore, it has to be decided what is the nature of fraud; whether this Court is competent to decide such issue at the threshold in proceedings under Article 226 of the Constitution without probing into the factual matrix of the dispute involved. It is only when the fraud is patent and writ large on the face of records, the Court need to invoke its power under public law to unsettle a transaction which has taken place. In that context, it is appropriate to refer the fraud alleged in the writ petition. 9. **Fraud** : The principal borrower, in this case, is the fourth respondent. The auction purchaser of the sale is his wife, the fifth respondent. The liability to be discharged to the bank was only ``` WPC 13801/2008 ``` ## **-:6:-** around Rs.25,000/-. The property was mortgaged for obtaining a loan amount of Rs.50,000/-. To discharge the liability of Rs.25,000/- of the husband, the wife, the fifth respondent purchased the entire property. At least property would worth more than Rs.50,000/- as on the date of sale. Perhaps, nothing speaks better than this intention of the parties about fraud. However, that “ill-motivated” intention should vitiate the proceedings. Then the Court has to find out anything more than that intention. Bad motives or ill motives cannot be attributed to vitiate a transaction. Therefore, it has to be found out what is the nature of fraud committed. It is to be noted that the notice for sale to be served on the petitioner was acknowledged by the auction purchaser, the fifth respondent on behalf of the petitioner. This is so endorsed on the rear side of the notice as seen from the file. The original notice of sale which was scheduled on 29/3/2004 was also acknowledged by the fifth respondent, Rekha Suresh. Similarly, the adjourned notice was also acknowledged by the fifth respondent. It is also equally important that all notices addressed to the writ petitioner in the arbitration proceedings were also acknowledged by the fifth ``` WPC 13801/2008 ``` ## **-:7:-** respondent on behalf of the writ petitioner. This clearly shows the deceitful mind of the fifth respondent or the fourth respondent. That clearly shows that the petitioner was unaware of the arbitration proceedings as well as the sale concluded thereafter. No notices were ever served on the petitioner. In such a situation, this Court has to hold that the notices were received by the fifth respondent on behalf of the petitioner with an intention to defeat the petitioner. Had the fifth respondent any genuine interest in discharging the liability of her own husband, she would have discharged the liability of her husband instead of purchasing the entire property including the share of the petitioner. Assuming that she wants to have a share in the property for the money she expended, she should have purchased the share of her husband which is worth only 50% i.e.Rs.25,000/-, the amount due to the bank. Further, it is to be noted that the fifth respondent has no job or avocation to raise the amount. She had an explanation that her mother had advanced the money for purchase of the property. This Court cannot for the moment believe the explanation of the fifth respondent as all the other aspects involved in the matter clearly ## **`WPC 13801/2008`** ## **-:8:-** indicate her deceitful mind in this regard. From the very beginning of institution of the arbitration suit itself she had entertained a deceitful mind to defeat the interest of the petitioner, that is why she had received the entire notices. She has no case that she was authorised to receive the same. Coupled with this fact and taking note of the fact that half of the liability has been discharged by her own husband, this amount also might have been advanced by her own husband to get the entire property in her name. As already noted above, if the fraud patent on the record itself, the Court need not hesitate to interfere in such matter, especially when fraud is made on public officials. In fact, in the counter affidavit filed by the third respondent, it is stated that they served notice on the fifth respondent on the bona fide belief and they have done everything in good faith. Therefore, the fraud can be detected on the face of the record itself and this Court need not hesitate to hold that the sale of the share of the petitioner is vitiated by fraud. 10. It was argued that the petitioner is having an alternate remedy in terms of Rule 83 of Co-operative Societies Rules, 1969. The above rule provides for setting aside sale on the ground of ## **`WPC 13801/2008`** ## **-:9:-** irregularity or fraud. However, this application has to be filed within 30 days from the date of sale. It also refers setting aside sale notwithstanding the fact that no such application has been filed if Registrar finds it has to be set aside on the grounds enumerated under Rule 83. However, this provision according to me would apply only before confirmation of sale and granting sale certificate. Once Registrar issues certificate of sale, he has no authority to invoke _suo motu_ power to set aside sale. Therefore, the petitioner cannot be relegated to the Registrar. 11.Next point that is to be considered is whether the issue is barred by the principles of _res judicata_ . No doubt, this Court is also bound by any issues that has been decided between the parties before a civil court. The petitioner clearly asserted in the writ petition that the suit was dismissed as it was not maintainable. The respondents have not controverted that assertion in the counter affidavit. There is no record before this Court to uphold the contention of the respondents 4 and 5 that the issue has been decided by the civil court. Mere dismissal of the civil suit without going into the adjudication of the dispute will not preclude this ## **`WPC 13801/2008`** ## **-:10:-** Court from considering the dispute. Absolutely, there are no materials before this Court to conclude that the issue has been decided by the civil court. Reference to the allegations in the plaint can only point out what is the nature of the allegations unless and until the issue is decided by the civil court, this Court cannot say that the issue has been decided. Further, Order 2 Rule 2 of the Civil Procedure Code that would apply to civil court cannot be made applicable to writ proceedings. Thus, this point has also to be answered against respondents 4 and 5. 12.The learned counsel for the party respondents relied upon the judgment of the Hon'ble Supreme Court in **Syndicate Bank v. New Look Rubbers (P) Limited and others** [( **2008) 5 SCC 274]** to contend that the issues cannot be re-opened through writ proceedings as the issue has been once decided by the civil court. In fact, the judgment relied upon by the learned counsel itself refers that it was a case in which the issue has been decided by the civil court. In this case, there is nothing to show that the issue has been decided by the civil court. The judgment of a learned Single Judge of this Court in W.P.(C).No.11461/2004, ``` WPC 13801/2008 ``` ## **-:11:-** dated 23.5.2009, relied upon by the party respondents also has no relevance in this case. That was a case where this court referred the dismissal of a suit on the ground of limitation. 13.Next important question is on the ground of laches. Respondents 4 and 5 would argue that since Rule 81 contemplates public notice, publishing the sale auction proclamation in the office Registrar, Tahsildar and Village Officer, the petitioner must have at least constructive knowledge of such publication and therefore, the writ petition is bound to be dismissed on the ground of laches. It is to be noted that the writ petition was filed after lapse of more than three years. The question of laches sometimes arise for consideration in writ jurisdiction also, though there is no period of limitation as such prescribed for invoking remedy under Article 226 of the Constitution. If there is clear laches on the part of the aggrieved, the Court must decide against granting any relief to the aggrieved. In this case, there is nothing to indicate that the petitioner had knowledge of the sale prior to January, 2007. Proclamation of sale in the Village Office or public offices itself will not count as laches unless it is required to be reckoned for the ``` WPC 13801/2008 ``` ## **-:12:-** purpose of limitation. The question relating to limitation and question relating to laches are to be measured by applying different parameters or norms. Limitation is certainly construed and reckoned with reference to definite parameters like date of proclamation of sale etc. But as far as the question of laches is concerned, it is related to conscious act of the party and more particularly it is related to his conduct in relation to the right known to him. If a person had a right and he had knowledge about such right and he is not taking up his right within a reasonable time and diligently, certainly it has to be treated that his grievance has to suffer on account of laches. But in this case absolutely there is no material to hold that the petitioner was aware of such notices any time prior to January, 2007. On the other hand, all that would show that the notices from arbitrator and all others have been served on the fifth respondent, auction purchaser. Therefore, in such circumstances, this Court is of the view that the writ petition is not liable to be dismissed on account of delay or laches. 14.The fraud, especially, on committing on public officials is a matter of grave concern. This Court cannot become oblivious to such ## **`WPC 13801/2008`** ## **-:13:-** action of parties. Certainly, it must be visited with serious consequences. The offence as such above may overlap in Section 182 or Section 420 of the Indian Penal Code. However, this Court is of the prima facie view that offence has been committed and it is for the investigating agencies to conduct enquiry and take appropriate action. 15.Then, the next point is to what relief the petitioner is entitled to: In fact, the property was mortgaged for Rs.50,000/-. The liability as on the date of sale was only Rs.25,000/-. There was no challenge from the husband of the auction purchaser regarding the sale. Therefore, as far as his liability is concerned, who is the principal borrower, I need not interfere with the sale. Admittedly, more than Rs.25,000/- was due from him. The bank also need not return the amount to the fifth respondent and can set off the amount towards share of her husband. Thus, the sale only to be interfered to the extent of the share sold in public auction as far as the petitioner is concerned. 16.Thus, the writ petition is allowed on the following terms: ## **`WPC 13801/2008`** ## **-:14:-** (a)The sale of the share of the petitioner in public auction conducted by the third respondent which was purchased by the fifth respondent is set aside. - (b)The revenue authorities and other authorities shall take note of the above and make necessary corrections in the records. - (c)The jurisdictional Police, Thodupuzha shall register an FIR and conduct an investigation as to the fraud and cheating committed in the matter of sale and take investigation to its logical conclusion untrammelled by any observations in this judgment. A report in this regard shall be filed within three months. It is made clear that it is for the Police to find out who are the real culprits. - (d)In the nature of the above, the costs shall follow the event. Accordingly, the fourth and fifth respondents shall pay costs of Rs.50,000/- (Rupees fifty thousand only) to the petitioner within two months. ``` WPC 13801/2008 ``` ## **-:15:-** 17.The Registry shall return the original records in Arbitration Case No.1523/2003 and E.P.No.908/2003 produced before this Court by the learned Special Government Pleader on behalf of the Assistant Registrar (General), Office of the Co-operative Societies, Thodupuzha to the learned Special Government Pleader after retaining a certified copy of the records produced. The writ petition disposed of as above. Sd/- ## **A.MUHAMED MUSTAQUE, JUDGE** ms ``` WPC 13801/2008 ``` **==> picture [419 x 610] intentionally omitted <==** **-:16:-** ``` WPC 13801/2008 ``` ## **-:17:-** **==> picture [432 x 575] intentionally omitted <==**