R.S.A No. 2045 of 2006 ::1:: IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A No. 2045 of 2006 Date of decision : July 28, 2009 The Ropar Plot Holders Cooperative Housing Construction Society Ltd. Ropar ...... Appellant (s) v. Raj Kumar and others, ...... Respondent(s) *** CORAM : HON'BLE MR.JUSTICE AJAY TEWARI *** Present : Mr. Ashwani Prasher, Advocate for the appellants. Mr. Vikas Mohan Gupta, Advocate for the respondents. *** 1. Whether Reporters of Local Newspapers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest ? *** AJAY TEWARI, J (Oral) This appeal has been filed against the judgment of the learned lower appellate Court reversing that of the trial Court thereby decreeing the suit of the plaintiffs (respondents No.1 and 2) for declaration that the award dated 15.9.1997 and recovery proceedings initiated on the basis thereof are illegal, null and void and non-effective against the plaintiffs. Kulwant Rai (Respondent No.3) had been advanced a loan of Rs.80,000/- from defendants No.2 and 3 against plot No.269, Giani Zail R.S.A No. 2045 of 2006 ::2:: Singh Ropar and executed a registered mortgage deed. However, neither the title deeds were retained by respondent No.3 nor the factum of mortgage deed was got recorded in the property register of the Improvement Trust/Municipal Committee. About 10 years after the loan transaction, respondents No.1 and 2 purchased the property in the year 1994. Three years thereafter arbitration proceedings were launched by the appellant against the person who had sold the property to the said respondents. Counsel for the appellant is not in a position to deny that even the said person was never served in those proceedings. Ultimately, exparte award was passed in favour of the appellant permitting recovery by sale of the mortgaged property. It is in these circumstances that this appeal has been filed. Counsel for the appellant has raised the following questions :- “ a) Whether the plaintiffs are entitled for declaration that the award dated 15.9.1997 is illegal, null and void in view of the bar of jurisdiction of the civil Court as per Section 82(3) of the Punjab State Cooperative Societies Act, 1961 ? b) Whether in view of the mortgage deed Ex.D1 executed by Shri Kulwant Rai s/o Hari Chand, resident of House No.78, Sector 15-A, Chandigarh in favour of the appellant-defendants (plaintiffs) are the successors of Shri Kulwant Rai as they have stepped into the shoes of Shri Kulwant Rai who took the loan from the appellant- defendants for the construction of the plot No.269 situated in Giani Zail Singh Nagar, Ropar ? R.S.A No. 2045 of 2006 ::3:: c) Whether the filing of the present suit by the plaintiffs is a res judicata within the meaning of Section 11 of the Code of Civil Procedure ?” Counsel for the appellant has argued that having purchased the property from the borrower, the appellant stepped into the shoe of the borrower and, thus, the suit in contravention of Section 55 of the Cooperative Societies Act, 1961 was barred. Learned lower appellate Court has held that respondents No.1 and 2 being purchasers for valuable consideration after making reasonable inquiries, and more importantly having no notice of the loan transaction between the appellant and the seller, were protected under Section 41 of the Transfer of Property Act, and not being members could maintain the suit. In my opinion, no fault can be found with the reasoning of the lower appellate Court. Thus, questions No.(a) and (b) are held against the appellant. As regards question No.(c), once it is found that respondents No.1 and 2 were not party in the arbitration proceedings, and thereafter filed an appeal which was dismissed in default, it cannot be held that the said dismissal operates as res judicata. Consequently, this appeal is dismissed with no order as to costs. As the main appeal has since been disposed of, all the pending civil miscellaneous applications, if any, also stand disposed of. ( AJAY TEWARI ) July 28, 2009. JUDGE `kk' R.S.A No. 2045 of 2006 ::4::