*THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA + WRIT APPEAL No.1168 of 2003 % 28.09.2011 Between: Pothula Ranga Rao, S/o.Butchapa Naidu …Appellant and The Ongole Tobacco Processing and Marketing Cooperative Society, Ongole, represented by its President, Sri D.Poli Reddy And others …Respondents ! Counsel for the Appellant: Sri E.Manohar, Senior Advocate, For Sri K.Anand Rao ^Counsel for the Respondents: Ms.K.Lalitha G.P. for Cooperation <Gist: >Head Note: ? Citations: 1. AIR 1954 SC 340 2. AIR 1956 SC 87 3. AIR 1962 SC 199 4. AIR 1964 SC 1300 5. AIR 1966 SC 634 6. AIR 1973 SC 2071 7. AIR 1974 SC 1331 8. AIR 1958 AP 763 9. 1975 An.WR 60 10. 1993 (1) ALT 529 (DB) 11. AIR 1939 Cal 403 12. AIR 1926 Mad 421 13. 1996 (2) MLJ 90 14. AIR 1975 Mad 103 15. AIR 1965 SC 304 16. AIR 1954 SC 340 THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA WRIT APPEAL No.1168 of 2003 28.9.2011 Between: Pothula Ranga Rao, S/o.Butchapa Naidu … Appellant AND The Ongole Tobacco Processing and Marketing Cooperative Society, Ongole, represented by its President, Sri D.Poli Reddy And others …Respondents THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA WRIT APPEAL No.1168 of 2003 ORDER: (Per Hon,ble Sri Justice V.V.S.Rao) The Andhra Pradesh Co-operative Societies Act, 1964 (the Act) is an Act to consolidate and amend the law relating to co- operative societies in the State. It regulates the registration, functioning, management, elections and all other aspects in relation to co-operative societies. Section 121 of the Act ousts jurisdiction of any Court or Forum for the adjudication of disputes between a society and its members or between a society and a third party in respect of disputes touching the constitution, management or the business of a society, other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee. Chapter VIII consisting of Sections 61, 62 and 63 contains the procedure for settlement of disputes. Chapter X contains Sections 70 to 74. These provide for the execution of decisions, decrees and orders passed under the Act either by the Registrar or an arbitrator on whom the power is vested by the Government to resolve the disputes. Needless to mention that the power to pass an order or award under Section 62 of the Act after adjudicating the dispute or to execute orders, attach and sale of property inhere in the Registrar of a co-operative society. Section 2(n) of the Act defines ‘Registrar’ means the Registrar of Co- operative Societies appointed under Section 3(1) and includes any other person on whom all or any other powers of the Registrar are conferred. Section 3(1) of the Act confers powers on the Government to appoint a Registrar of co-operative societies and as many other persons as the Government may think fit. Every other person appointed under Section 3(1) of the Act shall exercise all such powers of the Registrar as the Government may from time to time confer. Such exercise of power by persons appointed as Registrars shall be subject to general superintendence of the Registrar. The Andhra Pradesh Co-operative Societies Rules, 1964 (the Rules) promulgated in exercise of powers under Section 131 of the Act defines the Registrar of the District (Rule 2(k)) as to mean a person authorized by the Registrar to exercise in the District the powers of the Registrar under Section 70 of the Act. According to Rule 2(l) “sale officer” means an officer of the Co-operative Department or an officer of any Co-operative Society empowered by the Registrar to attach and sell the property of defaulters or to execute decision/orders of Registrar of the district or to execute or to carry out any orders of the Registrar in regard to attachment and sale of the property. Rules 52 to 55 of the Rules contain detailed procedure to be followed in execution of decrees, decisions or orders. Rule 52 of the Rules with twenty-five (25) sub-rules is a self-contained provision elaborating the execution procedure. The procedure is (a) for initiating execution of a decree, decision or order; (b) for attachment and seizure of movable and immovable property to be sold in execution of the decree; (c) for proclamation of sale; (d) for conducting the auction of property; (e) to stop auction sale; (f) for confirmation of sale; (g) for filing and consideration of claim petitions either by the judgment debtor or a third party and adjudication thereof; and (h) for setting aside sale in case of any irregularity or illegality. The power is conferred on the Registrar of the district as defined in Rule 2(k) of the Rules and the sale is conducted on the orders of the Registrar by the sale officer. When the immovable property to be attached and sold in execution of a decree or award for payment of money passed by the Registrar under Section 62 of the Act, the Registrar has to follow the mandatory procedure contemplated under Section 52(1) which we quote hereunder. 52. Procedure in execution of decrees, decisions or orders:- (1) Any decree-holder may apply to the Registrar of the district in which the cause of action arises for the execution of his decree after depositing the necessary costs on a scale fixed in this behalf. The Registrar shall, in case where the application for the recovery of any amount due under a decree or order of the Civil Court, apply to the Civil Court which passed the decree or order for the transfer to him of the said decree or order and the records specified in Rule 6 of Order XXI in the First Schedule to the Code of Civil Procedure and on receipt of such application the Civil Court shall transfer them to the Registrar of the District. Where, in connection with the proceedings on an application under Section 70 of the Act, any person requires the issue of any process, or objects to any process issued or proposed to be issued or requires the adjournment of any proceedings or objects to any order passed, he shall pay such fees as may be fixed in this behalf. If the defaulter resides or the property to be proceeded against is situated in a district other than that in which the cause of action arose, the application shall be made to the Registrar of the district in which the cause of action arose who shall transfer the application to the Registrar of the district where the defaulter resides or other property is situated. If the judgment debtor/defaulter resides or the property to be sold in execution of award/decree is situated in a district other than that in which cause of action arose, the decree holder shall have to necessarily apply to the Registrar of the district in which cause of action arose and then the Registrar shall transfer the application to the Registrar of another district where the defaulter resides or his property is situated. The Registrar of the district where the cause of action arose, cannot proceed either with the attachment or sale of movable or immovable property. The cause of action for execution of a decree or order is an order or award passed under Section 62 or 70 of the Act. This necessarily means such an order is passed by the Registrar or arbitrator of the district where a claim or application was filed by the society registered within the jurisdiction of such officer. If a Registrar of the district ignores jurisdictional aspect and proceeds with attachment and sale of immovable property, which is situated in the district other than the district where cause of action arose, whether such sale is not rendered void by reason of the judgment debtor/defaulter not raising any objection at the earliest point of time but doing so at the stage of confirmation of sale? This issue falls for consideration in this writ appeal filed against the order of the learned Single Judge dated 15.11.2002 in W.P.No.10055 of 1999 whereby and whereunder it was held that the Deputy Registrar of Co-operative Societies, Guntur; fourth respondent herein – who sold the property of the first respondent situated in Tangutur in Prakasam District had no jurisdiction to proceed with the matter for the sale of the property. The admitted fact of the matter, in brief, is as follows. The Guntur District Cooperative Marketing Society, fifth respondent herein (hereafter, Guntur Society) was registered under Section 16(2) of the Act. At the time of registration, its operational area was extended to the entire Revenue District of Guntur. Inter alia Guntur Society was formed for sale and marketing of agricultural and other produce belonging to its affiliated societies, their members; to act as an agent for distribution of agricultural inputs like fertilizers, agricultural implements; for distribution of basic and standard requirements which the cultivators require such as sugar, kerosene etc., and to develop, assist and coordinate the activities of affiliated societies. Its byelaws were registered by the fourth respondent on 25.10.1967 in accordance with the Act. Byelaw 20 vests the executive management of the affairs of the society in a Board of directors consisting of thirteen (13) members. It has powers to raise or borrow money by way of loans as may be required from time to time. An executive committee is elected by the board to facilitate transactions. Under Byelaw 43 it is vested with the power to purchase and supply the requirements of affiliated societies on the basis of prior indent received and under Byelaw 26 it is competent to execute contracts, to institute, conduct, defend or compromise any legal proceedings by or against the society. The powers exercised by the board or executive committee in the matter of borrowing of funds either from the members or other persons shall be subject to the provisions of the Act and the Rules. The Ongole Tobacco Processing, Marketing and Cooperative Society, the first respondent herein (hereafter, Ongole Society) is a society registered under the Act. During 1967–70, Guntur Society supplied to them chemical fertilizers worth Rs.1.00 lakh. The amount was not fully paid. For recovery of unpaid amount of Rs.40,276.28 ps, Guntur Society filed an arbitration case under Section 61 of the Act on 22.7.1971. It was allowed by the fourth respondent on 20.7.1976 passing an award and decree for the said amount with interest at 9% per annum from the date of default till the date of payment. The amount was not paid. Therefore, in September, 1977, Guntur Society filed E.P.No.19/77-78 before the fourth respondent for recovery of Rs.91,125/-. On 29.9.1982 he authorised the sale officer (the Senior Inspector of Cooperative Society) to realize the award amount by sale of the properties of the Ongole Society situated in Prakasam district. The properties are the godown with the land admeasuring Acs.1.00 (out of Acs.5.97) in S.No.1263/2B situated at Tangutur and Acs.1.00 of land at Medarametla. These two items were attached by the sale officer. After obtaining the valuation certificate from the Tahsildar of Guntur, auction was conducted. At that time, a representative of Ongole Society requested to postpone the auction and offered to pay Rs.10,000/-. The sale officer, however, conducted auction on 10.11.1982 with an upset price of Rs.1,00,000/-. The appellant herein became highest bidder quoting Rs.74,000/- and deposited 15% of the price of the property as per Rule 52 (11)(g) of the Rules. The Ongole Society filed an objection petition under Rule 52(14)(i) of the Rules. They raised two infirmities in the auction, namely, Guntur Deputy Registrar had no jurisdiction and the property was sold at less than the upset price. Even while the said objection petition was pending, the sale officer conducted auction and sold Medarametla property of Ongole Society on 11.2.1983. Be that as it is, the objection petition was rejected on 26.5.1983, aggrieved by which Ongole Society filed revision petition before the Additional Registrar of Cooperative Societies on 28.8.2006. Two days after rejecting the objection petition, the sale of Tangutur property held on 10.11.1982 was confirmed under Section 70 of the Act read with Rule 52(14)(iii) of the Rules. The sale certificate was, accordingly, issued on 17.6.1983. The Additional Registrar of Cooperative Societies allowed the revision on 28.4.1986 and set aside the sale on the ground that the Deputy Registrar, Guntur had no territorial jurisdiction. The Guntur Society then approached the Government by filing a further revision. By their orders, in G.O.Ms.No.603, dated 27.10.1987, the Government allowed the revision and set aside the order of the Additional Registrar of Cooperative Societies. This was assailed in W.P.No.8589 of 1990 inter alia on the ground that the Government passed orders without notice to Ongole Society. The plea was accepted and this Court, by order dated 14.2.1997, set aside G.O.Ms.No.603, dated 27.10.1987 and remitted the matter to the Government to pass orders after issuing notice to both the parties. Thereafter, the Government passed orders, in G.O.Ms.No.106, dated 28.1.1999, holding that Ongole Society is estopped from raising the objection and that the sale officer has got jurisdiction to conduct sale. They also recorded finding that the price fetched in the auction was reasonable. This order was assailed by Ongole Society in W.P.No.10055 of 1999. The learned Single Judge, as noticed supra, allowed the writ petition on 15.11.2002 and set aside the sale only on the ground that the Deputy Registrar, Guntur had no jurisdiction to proceed with the matter for sale of the property of Ongole Society. The Senior Counsel for the appellant, Sri E.Manohar, would contend that Ongole Society never raised objection to the sale and offered Rs.10,000/- which they did not pay; the Deputy Registrar, Guntur being competent to pass award under Section 62 of the Act, is also competent to execute the award under Rule 52 of the Rules and, therefore, he does not suffer from inherent lack of jurisdiction; when an authority does not suffer from inherent lack of jurisdiction and objection as to the jurisdiction was not raised at the earliest point of time, a party to the proceeding is estopped and deemed to have waived the right to raise objection; and if the objection is raised under Rule 52(1) of the Rules, the proviso thereto does not enable setting aside of the sale. The appellant has filed a compilation of the following decisions, namely, Kiran Singh v Chaman Paswan[1], Merla Ramanna v Nallaparaju[2], Hira Lal Patni v Kali Nath[3], Dhirendra Nath Gorai v Sudhir Chandra Ghosh[4], Bahrein Petroleum Co. Ltd v P.J. Pappu[5], State of U.P. v M/s.Janki Saran Kailash Chandra[6], M/s.Kayjay Industries (P) Ltd v M/s.Asnew Drums (P) Ltd[7], Koduru Lalithamba v Borra Mangamma[8], Adapa Gopala Rao v Bandaru Kabbaiah[9], M.Chandrasekhara Reddy v Dy.Registrar of Co- op. Societies[10], Sakti Nath v Jessore United Bank[11], Rajagopala v Tirupathia Pillai[12], Ukaippaligal Munnani v Ganesan[13] and Nanak Chand v T.T.Elec. Supply Co.,[14]. The Senior Counsel, however, invited attention of this Bench to Hira Lal Patni and Dhirendra Nath Gorai. The Government Pleader for Cooperation sustains the orders in G.O.Ms.No.106, dated 28.1.1999. The Counsel for Ongole Society, Ms.K.Lalitha, would contend that as per Section 39(4) of the Code of Civil Procedure, 1908 (CPC), as amended by the CPC (Amendment) Act, 2002, the Court which passed the decree is barred from executing the same against any person or property outside local limits of its jurisdiction. According to her, the decisions relied on by the appellant were with reference to the provisions in CPC as it existed prior to 1976 amendment. Secondly, she would contend that even if a judgment debtor does not raise any objection as to the jurisdiction of the Deputy Registrar, Guntur or sale officer, Rule 52(1) of the Rules itself bars such authority from executing the award if the property is situated outside its territorial jurisdiction. She would urge that when an authority is mandated to act or not to act in accordance with the statutory powers any exercise beyond those powers would be without competence. The Deputy Registrar, Guntur, according to her, suffers from inherent lack of jurisdiction. She placed reliance on Kothamasu Kanakarathamma v State of Andhra Pradesh[15]. As the only question is with regard to territorial jurisdiction of the Deputy Registrar to execute the award dated 20.7.1976 by attachment and sale of property situated in Ongole, which is admittedly outside its jurisdiction, the issue centers round is inherent lack of jurisdiction. The general principles in relation to exercise of jurisdiction by a judicial or quasi judicial authority are well settled. The defect of jurisdiction – be it pecuniary or territorial or subject matter; strikes at the very authority of the Court to pass a decree. The defect of jurisdiction, therefore, cannot be cured even by consent of the parties (Kiran Singh v Chaman Paswan[16]). When a Court entertains a lis over which it has no jurisdiction, decree passed is a nullity and its invalidity could be set up whenever and wherever it is sought to be enforced even at the stage of execution or in a collateral proceedings. It is axiomatic that wherever jurisdiction is conferred by a statute and such jurisdiction is only given upon certain specified terms contained therein, those terms should be complied with, in order to create and raise the jurisdiction and if they are not complied with, the exercise of jurisdiction does not arise. When there is inherent lack of jurisdiction, the defect cannot be waived nor can be cured by acquiescence (Kothamasu Kanakarathamma). But if the jurisdiction is not wanting, a directory provision can obviously be waived. If a mandatory provision is conceived in public interest, such provision can also be waived (Dhirendra Nath Gorai). Rule 52 of the Rules, as analysed by us supra, absolutely bars the Registrar from executing an award if the defaulter or the property is situated outside his jurisdiction. In such an event, “he shall transfer the application for execution” to the Registrar of the district where the property is situated. The rule making authority enacted it in public interest because as already indicated herein above, the Government can appoint other persons as Registrars for the purpose of the Act only with limited powers as contained in the delegation of powers. Indisputably the Deputy Registrar empowered to deal with disputes under Section 61 of the Act is given a limited jurisdiction and, therefore, if Rule 52 of the Rules is construed as not barring a Registrar of a district to proceed with the sale of property situated in other district, it would certainly violate Section 3 of the Act under which certain Registrars are appointed. On a true construction of Section 52 (1) of the Act, it must be held that a Registrar or an officer conferred with the powers of Registrar can only sell property in execution of an award if such property is situated within his territorial jurisdiction. If the property is outside his territorial jurisdiction, he shall transfer the application to the Registrar of the district where property is situated. Therefore, the Deputy Registrar, Guntur suffers from inherent lack of jurisdiction. In the absence of jurisdiction even if there is no challenge, it does not amount to waiver as held by the Supreme Court in Kiran Singh, Dhirendra Nath Gorai and Kothamasu Kanakarathamma. The alleged implied consent or waiver by Ongole Society does not cure the defect of jurisdiction suffered by the Deputy Registrar, Guntur. Indeed even under Section 39(4) of CPC, the Court which passed the decree is not authorized to execute the decree against a person or property outside the local limits of its jurisdiction. This would also indicate that the embargo on the power of an executing Court to deal with the property outside its jurisdiction is enacted in public interest which it is a mandatory provision. Further, it casts a duty on the Deputy Registrar and even when a party to the execution proceedings does not raise objection, the Deputy Registrar is bound to transfer execution application to the Registrar of the District where the property is situated. Hira Lal Patni is not helpful to the appellant. The appellant therein through the respondent purchased the shares of a company in Agra. The respondent’s suit in the High Court of Bombay for recovery of his commission amount of Rs.1,00,000/- was referred to arbitrator, who gave award in favour of the respondent. The appellant’s challenge against the award in the High Court of Bombay failed and the award was incorporated in a decree of the Court. The same was transferred to the District Court, Agra for execution. An objection was raised inter alia on the ground that Bombay High Court had no jurisdiction to entertain the suit and make the award a decree of the Court. The executing Court as well as the High Court of Allahabad rejected the objections. In the Civil Appeal, the Supreme Court while reiterating that the competence of a Court to try a case goes to the root of the jurisdiction and when it is lacking it is a case of inherent lack of jurisdiction held that the objection as to local jurisdiction of a Court does not stand on the same footing and can be waived as per Section 21 of CPC. As a matter of fact, it was held that the Bombay High Court was competent to try a suit of that kind and did not inherently lack jurisdiction. This decision is of no assistance to the appellant because under Section 21 of CPC if an objection to the competence of the executing Court with reference to territorial jurisdiction is not taken at the earliest possible opportunity no such objection can be allowed subsequently. As per Section 52(1) of the Act, as found by us, the Deputy Registrar, Guntur suffered from inherent lack of jurisdiction to proceed against the property situated in Prakasam District and, therefore, the question of waiver does not arise. The learned Single Judge allowed the writ petition applying Section 52(1) of the Act. We do not find any reason to interfere with the order of the learned Single Judge. The writ appeal fails and is liable to be dismissed. The writ appeal, for the above reasons, is dismissed. No costs. ______________ (V.V.S.RAO,J) ____________________ (B.N.RAO NALLA,J) September , 2011. NOTE: L.R. Copy be marked. (By order) YS [1] AIR 1954 SC 340 [2] AIR 1956 SC 87 [3] AIR 1962 SC 199 [4] AIR 1964 SC 1300 [5] AIR 1966 SC 634 [6] AIR 1973 SC 2071 [7] AIR 1974 SC 1331 [8] AIR 1958 AP 763 [9] 1975 An.WR 60 [10] 1993 (1) ALT 529 (DB) [11] AIR 1939 Cal 403 [12] AIR 1926 Mad 421 [13] 1996 (2) MLJ 90 [14] AIR 1975 Mad 103 [15] AIR 1965 SC 304 [16] AIR 1954 SC 340