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B.S. SHESHAGIRI SETTY & ORS. Versus STATE OF KARNATAKA & ORS.

2015 (10) TMI 2532 - SUPREME COURT

Revision Petition filed before the Minister for Co-Operation - whether petition is barred by time in light of the provisions of Section 108 of the Karnataka Cooperative Societies Act, 1959? - Held that:- In the instant case, the fact of repayment of the principal loan amount to the Bank before the confirmation of the auction sale, shows that confirmation of the auction of the immoveable property was grossly illegal. The said sale was in contravention of the notification issued by the State Gover .....

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ce. The action of the sale officer has resulted in the deprivation of the right to livelihood of the appellants who are small landowners, guaranteed to them under Article 21 of the Constitution of India. - Further, Section 108 of the KCS Act confers the power of revision on the state government suo moto at any time, or on application by an applicant within 6 months of the passing of an order. The KCS Act is a special legislation. Thus, by virtue of Section 29(2) of the Limitation Act, 1963, .....

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not open for the respondents to contest the same by urging technical grounds, especially in light of the fact that the power conferred upon the state government under Section 108 of the KCS Act is ‘suo moto’ and the same can be exercised ‘at any time’. Therefore, having regard to the facts of the case, in the absence of an application for condonation of delay, we hold that the exercise of the power by the Minister for Co-operation, State Government of Karnataka must be taken as a suo moto exerci .....

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the reasons mentioned supra, we are of the view that the confirmation of auction sale of the immoveable property in question was illegal. The learned High Court erred in setting aside the order dated 9.2.2004 of the Minister for Cooperation, State Government of Karnataka, passed in the Revision Petition. The same is erroneous and liable to be set aside. Accordingly, we pass the following order: The Civil Appeals are allowed and set aside the impugned judgments and orders passed in the Writ Petit .....

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the date of receipt of this order, failing which the respondent Nos.1 to 5 shall take coercive steps against the auction purchaser or any person claiming through him, with police help if required, and re-deliver the possession of the immoveable property to the appellants and submit compliance report before this Court. - CIVIL APPEAL NOS.8663-8664 OF 2015 (Arising Out of SLP (C) Nos.10802-10803 of 2013) - Dated:- 15-10-2015 - THAKUR, T.S. AND GOPALA GOWDA, V., JJ. JUDGMENT For the Petitioner : Mr .....

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ition Nos. 22453 of 2004 and 17054 of 2004, setting aside order dated 9.2.2004 passed in the Revision Petition No. CMW 33 CAP 98 by the Minister of Cooperation on the ground that the Revision Petition filed by the appellants herein is barred by limitation and is contrary to the provisions of Section 108 of the Karnataka Cooperative Societies Act, 1959 (hereinafter KCS Act ). 3. Though the case has a chequered history, we refer to the facts in brief hereunder, which are required to appreciate the .....

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5 0 Acre 38 Guntas 556 0 Acre 14 Guntas 557 1 Acre 28 Guntas 4. Admittedly, the appellants initially were able to pay only one instalment of the loan, and were not able to pay the subsequent instalments. The respondent Bank filed a petition before the Arbitrator of Co-Operative Societies, Chikmagalur District, which was registered as a case in Dispute D.T.C 75/1974-1975. The learned Arbitrator, passed an ex parte award in favour of the Bank by his order dated 31.05.1975, holding as under: &helli .....

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t realized by the said sale, the balance shall be recovered from the respondents personally. The said sum may also be recovered from the sale of the moveable properties of the respondents. On 27.05.1981, the bank conducted the auction sale of the immoveable property in public auctions and the bid stood at ₹ 40,050/-. Being aggrieved of the award of the Arbitrator as well as the sale of the property, the appellants filed an appeal before the Karnataka Appellate Tribunal, Bangalore. During t .....

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loans also) if the principal amount is paid in a single payment before 30.6.1983 interest and compound interest will be completely exempted……… Pursuant to this offer, the appellant paid to the Bank the entire remaining loan amount of ₹ 7050/- on 30.06.1983, excluding the interest as he had already deposited an amount of ₹ 9,000/- with the Karnataka Cooperative Society on 07.09.1981. 5. The learned Karnataka Appellate Tribunal allowed the appeal filed by the appel .....

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appealappeal No. 431 of 1981- after six years. Every one of the reasons on which those respondents sought of condonation of delay in filing their reading of the applications should have rejected that respondents 5 and 6 had not been served, had condoned the delay in filing the appeal. Assuming that reason opinion, particularly having regard to the fact that they were not other than the sons of respondent-4, who had appeared before the Arbitrator and had consented for a decree sought by the soci .....

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ainst the respondents therein, the High Court held as under: An award/ decree made against a person, though he was not served in the proceedings, is never considered as a decree made without jurisdiction. A decree or an award against a person who has not been served at the highest may be an irregularity and does not amount to a case of inherent want of jurisdiction nullifying such a decree on that ground. Without any doubt, the view taken by the Tribunal that the award made by the arbitrator in .....

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ents-7 and has done doubtful justice to respondents 4 to 6 is liable to be interfered with by me under Articles 226 and 227 of the Constitution. 6. The Writ Appeal preferred by the appellants against the order of the High Court dated 29.11.1985 was dismissed by the Division Bench of the High Court vide judgment and order dated 01.03.1990. While upholding the findings of the learned single judge of the High Court, the Division Bench held as under: In addition to this, we have already noticed from .....

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ne roof. Hence it is difficult to believe the version of the appellants that they were not aware of the award. All that can be said in the instant case is that the explanation as to the ignorance of the award proceedings is opposed to the realities of life. 7. In the meanwhile, on 10.12.1985, the Assistant Registrar of Cooperative Societies issued a certificate of sale under Rule 38(7) of the Karnataka Cooperative Societies Rules, 1960 (hereinafter KCS Rules ) in favour of the auction purchaser .....

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r of Cooperative Societies, is contrary to law, but they have not specifically mentioned or proved as to how the confirmation of sale is in violation of the K.C.S Act or contrary to Rule 38 of the K.C.S Act and the Rules. Therefore the order of confirmation of sale passed by the Assistant Registrar of Cooperative Societies is upheld and the appeal is dismissed. 8. The appellants then filed a Review Petition under Rule 38(5)(a) of the KCS Rules, challenging the order of confirmation of sale of th .....

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uty Registrar held as under: This Court has no jurisdiction to entertain the Revision Petition filed by the Petitioner under Section 108 of the Cooperative Societies Act, 1959. I am of the opinion that the Revision Petition is liable to be dismissed as not maintainable at the preliminary stage of admission. The appellants thereafter filed a Revision Petition under Section 108 of the KCS Act before the Minister of Co-operation, Government of Karnataka. By order dated 09.02.2004, the Minister of C .....

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given thought on merits all along by the authorities. If it was the claim of the petitioners that they have managed to repay a substantial part of the loan i.e the principal amount before the specified date as in the circular dated 02.03.1984 and that therefore they have complied with the condition as laid out in the circular, it must have been the duty of the appellate authorities to examine the said contentions and then decide the matter keeping in mind the conditions of the said circular. The .....

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latched on to technical considerations and have not analysed the matter objectively. It appears that their approach has been rather narrow and such long drawn litigation could have been avoided, had the authorities thought in a more rational manner instead of going into avoidable technicalities. I am of the opinion that the DRCS should have examined the facts and circumstances of the auction sale in the appeals before him and decide the matter. Available facts indicate that such an effort was no .....

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ithin the ambit of the conditions stipulated in the circular dated 02.03.1984 which is based on a government order it would be appropriate to make all efforts to see that such a benefit reached the persons to whom it was intended to reach in the first place...... (emphasis laid by this Court) 9. The auction purchaser (respondent no. 6 herein) challenged the aforementioned order of Minister of Cooperation dated 09.02.2004 passed in the Revision Petition, by way of filing Writ Petition No. 17054 o .....

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he same would not enable the government to set aside the auction of the land which was conducted and confirmed in December, 1985. It was further held by the learned single judge that in any case, the said circular was not at all applicable when the property was transferred to a third party. The appellants preferred Writ Appeal No.411 of 2006 c/w Writ Appeal No. 410 of 2006 questioning the correctness of the order dated 24.1.2008 passed in Writ Petition No. 17054 of 2004 etc. The High Court dismi .....

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in six months from the date of confirmation of the same, since the sale is confirmed in 1985. The appellants could not have filed a revision in 1998, 13 years after the orders of confirmation. Even if it is held that suo moto at any time, the Government can exercise the powers of revision, then also, it has to be exercised within a reasonable time not beyond a period of three years.... Viewed from any angle, the revision petition allowed by the Hon ble Minister was clearly barred by time and the .....

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y framed the following points which require our attention and consideration:- 1.Whether the Revision Petition filed before the Minister for Co-Operation is barred by time in light of the provisions of Section 108 of the Karnataka Cooperative Societies Act, 1959? 2.Whether the interest of the auction purchaser is protected on grounds that he is a bona fide third party? 3.What order? Answer to Point No. 1 11. The litigation in this case has been quite lengthy, which has seen multiple hearings befo .....

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land of the appellants vide certificate dated 10.12.1985. The appeal filed against the confirmation of sale was rejected by the Deputy Registrar of Cooperative Societies vide order dated 09.05.1986. A Revision Petition was then filed before the wrong forum, which was rejected. Then a Revision Petition under Section 108 of the KCS Act was filed before the Minister for Cooperation, State Government of Karnataka. The Minister allowed the Revision Petition and set aside the confirmation of the sale .....

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, in terms of Section 82-A of the KCS Act, which reads as under: 82A. Powers of Land Development Banks to advance loans and to hold lands. - Subject to the provisions of this Act and the rules made thereunder, it shall be competent for the Agriculture and Rural Development Banks to advance loans for the purposes referred to in section 76A, and to hold lands the possession of which is transferred to them under the provisions of this Chapter. Chapter XII of the KCS Act pertains to Execution of Awa .....

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nding demand due to the society by any member or past or deceased member, by sale of the property which is subject to a charge under sub-section (1) of section 32 Chapter XIII of the KCS Act pertains to Appeals, Review and Revision. Section 105 of the KCS Act provides for appeals to the Tribunal: 105. Appeals to the Tribunal.- Any person aggrieved by,- ……… (c) any award of an Arbitrator under clause (c) of sub-section (1) of section 71; ……… may, within s .....

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icer subordinate to it except those subject to appeal or revision by the Tribunal or those in respect of which an appeal has been made to the State Government under section 106, and the State Government after such enquiry as it deems fit is satisfied that the order of the officer is contrary to law and has resulted in a miscarriage of justice, pass such orders thereon as the State Government deems just: Provided that no order shall be made to the prejudice of any person under this section unless .....

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ted in miscarriage of justice. 13. Mr. S.N Bhat, the learned counsel appearing on behalf of respondent no. 6, the auction purchaser vehemently contends that the limitation period prescribed for filing revision petition by the Appellants under Section 108 of the Act is six months. It is further contended that in the instant case the petition was unduly delayed, and that the appellants had not even filed an application for condonation of delay before the Minister. The learned counsel further place .....

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ents 2 to 4 and the said revision has not been filed within six months…… The learned counsel has placed reliance upon the decision of this Court in V.N Shrikhande (Dr.) v. Anita Sena Fernandes (2011) 1 SCC 53 to contend that a statutory authority has no jurisdiction to entertain a petition beyond the period prescribed for presenting the petition unless an application for condonation of delay is filed. The learned counsel further contends that even in cases where no limitation perio .....

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er of the Minister of Co-operation, Government of Karnataka in the Revision Petition on the ground that it was barred by limitation. The learned counsel places reliance upon the case of Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. (1987)2 SCC 107, wherein this Court has laid down the following principles to be applied while condoning delay : 1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a mer .....

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d technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected n .....

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ed counsel for both the parties. We are unable to agree with the contentions advanced by the learned counsel appearing on behalf of respondent no. 6. This case is a classic example to demonstrate the gross miscarriage of justice that occurs when the principles of natural justice are ignored for technical considerations. The appellants in the present case are poor farmers, who have been made to litigate for nearly three decades for their land, which was their only source of income and livelihood, .....

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cipal amount to such Banks, then in such cases, the State Government would bear the burden of the entire portion of the interest on such loans on behalf of the farmers and reimburse the same to such respective Banks. As is evident from the letter Annexure P3 , the appellants had repaid the entire principal amount within the date specified in the circular, which fact has not been contested by the respondents. The Auction sale of the property in question was conducted on 27.05.1981, and the confir .....

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dated 27.12.1983 on the ground that the appeal before the Tribunal was barred by limitation. The Writ Appeals filed by the appellants were also dismissed. The confirmation of sale of the property in question was done on the basis of the order in the above mentioned Writ Petition. The same was challenged by the appellants before the Deputy Registrar of Co-operative Societies, who dismissed it on the ground that the appellants have not proved how the confirmation of sale is contrary to the provisi .....

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case of V.N Shrikhande referred to supra is misplaced, as that case pertained to the Consumer Protection Act, 1986 and the powers of the District Consumer Forums therein. Section 24A of the Consumer Protection Act, 1986 provides a limitation period of two years for filing a complaint, and the proviso expressly bars the National Commission from entertaining delayed complaints unless reasons for condonation of delay are provided. The learned counsel placed reliance on the following paragraph of th .....

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ay under Section 24A(2) by showing that there was sufficient cause for not filing the complaint within the period prescribed under Section 24A(1). If the complaint is per se barred by time and the complainant does not seek condonation of delay under Section 24A(2), the consumer forums will have no option but to dismiss the same…… The learned counsel on behalf of respondent no.6 contends that statutory authorities in general do not have the right to condone delay without an applicat .....

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y time; rather it should be exercised within a reasonable time. It is so because the law does not expect a settled thing to be unsettled after a long lapse of time. Where the legislature does not provide for any length of time within which the power of revision is to be exercised by the authority, suo motu or otherwise, it is plain that exercise of such power within reasonable time is inherent therein. (emphasis laid by this Court) If a statute does not prescribe the time limit for exercise of r .....

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arriage of justice caused to a public litigant. A three judge bench of this Court in the case of State of Haryana v. Chandra Mani & Ors. (1996)3 SCC 132 has held as under : The doctrine must be applied in a rational common sense pragmatic manner. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay .....

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State of Haryana & Ors. (2014) 14 SCC 127 as under : 15…The substantive rights of the appellants should not be allowed to be defeated on technical grounds by taking hyper technical view of self-imposed limitations…… 17. Further, Section 108 of the KCS Act confers the power on the State Government to pass any order as it may deem fit in case there has been a miscarriage of justice. The instant case falls squarely within the ambit of Section 108 of the KCS Act. The appella .....

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vernment of Karnataka in respect of the borrowers of the Bank, which sought to waive off the interest on the principal amount if the same was paid by 30.06.1983. The said notification was issued on the basis of a government order, traceable to Article 162 of the Constitution of India. Therefore, we have recorded the finding that the sale of the property and the confirmation of the auction sale is contrary to the notification referred to supra and law and has resulted in a gross miscarriage of ju .....

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ually important facet of that right is the right to livelihood because, no person can live without the means of living, that is, the means of livelihood. If the right to livelihood is not treated as a part of the constitutional right to life, the easiest way of depriving a person his right to life would be to deprive him of his means of livelihood to the point of abrogation. Such deprivation would not only denude the life of its effective content and meaningfulness but it would make life impossi .....

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ities. They migrate because they have no means of livelihood in the villages. The motive force which people their desertion of their hearths and homes in the villages that struggle for survival, that is, the struggle for life. So unimpeachable is the evidence of the nexus between life and the means of livelihood. They have to eat to live: Only a handful can afford the luxury of living to eat. That they can do, namely, eat, only if they have the means of livelihood……… (emphas .....

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proach of the High Court is highly pedantic and technical and therefore the same cannot be allowed to sustain in law. 20. Further, Section 108 of the KCS Act confers the power of revision on the state government suo moto at any time, or on application by an applicant within 6 months of the passing of an order. The KCS Act is a special legislation. Thus, by virtue of Section 29(2) of the Limitation Act, 1963, the power to condone delay is available with the state government. The contention of the .....

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in light of the fact that the power conferred upon the state government under Section 108 of the KCS Act is suo moto and the same can be exercised at any time . Therefore, having regard to the facts of the case, in the absence of an application for condonation of delay, we hold that the exercise of the power by the Minister for Co-operation, State Government of Karnataka must be taken as a suo moto exercise of power by him. Answer to Point No. 2 21. It was next contended by Mr. S.N. Bhat, the l .....

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even if the decree is set aside. 22. We are unable to agree with the above contention of the learned counsel on behalf of the auction purchaser. The auction purchaser, in our opinion, is not a bona fide purchaser. Section 89 of the KCS Act sets down the procedure of sale, which provides as under: 89. Power of sale when to be exercised.- (1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (Central Act IV of 1882), where a power of sale without the intervention of the cou .....

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ed the exercise of the power conferred by sub-section (1), after hearing the objections, if any, of the mortgagor; (b) notice in writing requiring payment of such mortgage money or part has been served upon,- (i) the mortgagor; (ii) any person who has any interest in or charge upon the property mortgaged or in or upon the right to redeem the same; (iii) any surety for the payment of the mortgage debt or any part thereof; and (iv) any creditor of the mortgagor who has in a suit for the administra .....

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produce their defence and objections to the same. Further, it is an admitted factual position that the appellants had repaid the principal loan amount as on 30.06.1983 itself. The confirmation of the auction sale was ordered on 10.12.1985. It was upon the auction purchaser to assess the circumstances in which the auction of the property was being conducted. Rule 38 of the KCS Rules, 1960, which pertains to Attachment and Sale of Immoveable Property, provides as under: 38. Attachment and Sale of .....

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effected. Notice shall also be given to the applicant and defaulter. The proclamation shall state the time and place of sale and specify as fairly and accurately as possible :- (i) the property to be sold, (ii) any encumbrance to which the property is liable; (iii) the amount for the recovery of which sale is ordered and (iv) every other matter which the Sale Officer considers material for a purchaser to know in order to judge the nature and value of the property. Further, the fact that the act .....

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