1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH AT NAGPUR SECOND APPEAL NO. 473 OF 2010 (MIRESH RAVINDRABHAI SHETH..VS..THE RECOVERY OFFICER, JANTA SAHAKARI BANK LTD.) WITH SECOND APPEAL NO.495 OF 2010 (MIRESH RAVINDRABHAI SHETH..VS..THE DISTRICT DEPUTY REGISTRAR OF COOPERATIVE SOCIETY & OTH..) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Office Notes, Office Memoranda of Coram, Court's or Judge's orders appearances, Court's orders of directions and Registrar's orders - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mr. Anant Dixit, Advocate for Appellant. Mr. S.V. Manohar, with Mr. H.R.Gadhia,Advocates for Respondent -Janta Sahakari Bank. Ms. Sangeeta Jachak, A.G.P. for Respondent-State. Mr. S.D. Sirpurkar, Advocate for Respondents No.5 & 6 CORAM : R.M.SAVANT, J. DATE : FEBRUARY 17, 2011. PC. The above second appeals challenge the judgment and decree dated 11th February, 2010 passed in Regular Civil Appeal No. 6 of 2005 by which the decree passed in Special Civil Suit No.87 of 1989 dated 24.12.2004 came to be set aside. This is a case where the auction sale pursuant to the award of the Co-operative Court dated 07.06.1976 is still pending though a period of about 34 years from passing of the award have elapsed. The facts of the instant case epitomize the manner in which the said auction sale for recovery of the amount in terms of the award dated 07.06.1976 are sought to be stalled one way or the other. 2 2. The appellant herein is the original plaintiff in Special Civil Suit No.87 of 1989. The respondents herein are the original defendants to the said suit. The appellant is the son of one Ravindrabhai Jivrajbhai Sheth. The said Ravindrabhai had taken a loan of Rs.25,000/- from respondent No.2 Bank on default being committed in repayment of the said loan, the respondent No.2 bank initiated recovery proceedings by filing arbitration case in the concerned Co-operative Court. It appears that in the said case a compromise award came to be passed in view of the compromise that was arrived at between the Bank and the father of the appellant Ravindrabhai. In pursuance of the said award execution proceedings were initiated by respondent No.1 Recovery Officer which ultimately reached the stage of auction sale of the mortgaged property, which consists of a plot with a shop on it. The auction sale was completed and the sale certificate came to be issued in favour of the auction purchaser. Much thereafter, in the year 1986, to be precised on 26.06.1986 Special Civil Suit No.87 of 1989 came to be filed by the appellant/ plaintiff questioning the said auction sale interalia on various grounds urged in the said suit, but primarily on the ground that the father of the plaintiff Jivrajbhai could not have mortgaged the property which was the subject matter of auction as the said property was an ancestral property and another ground raised was that the interest charged was excessive. On the aspect as to the delay in filing the suit the plaintiff averred that since Ravindrabhai and his brother were under preventive detention under MISA (Maintenance of Internal 3 Security Act, 1971) the suit could not be filed earlier. 3. The defendants herein, including the Bank, filed the written statements. It is required to be stated that in the said written statement the Bank had taken a stand that the plaintiff could not question the auction sale at the said late stage. The Bank pointed out as to why the auction sale was justified in the facts and circumstances of the case. The parties led their evidence in support of their respective cases. The trial Court framed the relevant issues in so far as the present Second Appeals are concerned, the issue Nos. 1, 2, 5 and 10 are relevant which are reproduced hereunder : “1. Whether the alleged decree and auction sale dated 28/8/78 stands vitiated on account of charging excessive interest then granted in the award ? .. Auction sale dt.28.8.1978 is illegal. 2. Whether the auction sale dt. 28/8/78 was illegal and bad in law, for want of proper procedure to be followed by defts. No.1 to 4 ?. … Affirmative. 3. … 4 …. 5. Whether the auction sale dt. 28/8/78 is illegal and not binding on plaintiff and his family members ? … Affirmative. 6. … 7. … 8. … 9. … 10. Wheth4er the suit is bad for want of notice u/s. 164 of the Maharashtra Co-operative Societies Act ? … Negative.” 4 4. The trial Court on the basis of the material on record answered the said issues against the defendants and decreed the suit of the plaintiff. The trial Court held that the defendants had not adhered to the procedure prescribed under the relevant rules and therefore, there was an infirmity in the auction that was carried out. Insofar as the aspect of notice under Section 164 is concerned, the trial Court was of the view that in the light of the fact that notice under Section 80 was given by the plaintiff and the same having received by the District Deputy Registrar there was compliance of Section 164 of the Maharashtra Co-operative Societies Act,1961, the trial Court, therefore, directed the defendants i.e. Recovery Officer of the Bank, to restore the possession of the mortgaged property, which was the subject matter of the auction sale. Being aggrieved by the decreeing of the said suit by the trial Court the defendants i.e. Recovery Officer of respondent No.1 Bank and the Bank filed two appeals being Regular Civil Appeal No. 6 of 2005 and Regular Civil Appeal No.41 of 2006; Since the said appeals arose out a common judgment and decree passed in Special Civil Suit No.87 of 1989, both the appeals were heard together. 5. The first appellate Court, on an appreciation of the material on record, confirmed the decree insofar as the illegality of the auction sale procedure was concerned. In the first appellate Court the appellants raised the issue as to the locus-standi of the plaintiff to file 5 the said suit. The locus-standi was questioned on the ground that the mortgaged property was the self acquired property of said Ravindrabhai and which position flows from the averments made in paragraph 2 of the plaint. The said issue sought to be raised by the appellants in the first appellate Court was objected to on behalf of the plaintiff. It was the contention of the plaintiff that having not questioned the locus- standi of the plaintiff before the trial Court it was not open for the appellants to raise the said issue before the first appellate Court for the first time as the same would entail evidence to be recorded. The objection of the plaintiff was turned down by the first appellate Court on the ground that the said issue is a question of law and therefore, could be raised even for the first time before the first appellate Court. The appellate Court thereafter in the light of the issue as regards the locus-standi of the plaintiff embarked upon the exercise to ascertain whether the plaintiff could be said to have any right qua the mortgaged property in question so as to entitle him to file the said suit. The first appellate Court taken into consideration the plaintiff’s own averments that the mortgaged property was received by way of gift by Ravindrabhai from his father, recorded a finding that the said mortgaged property by virtue of the gift given to the plaintiff's father by his father, was a self acquired property of Ravindrabhai and therefore, the plaintiff could not have any right qua the property especially when the said Ravindrabhai was alive. In view of the fact that the plaintiff had not adduced any evidence in support of his case that though the 6 said property was received by his father as and by way of gift from his father i.e. Jivrajbhai the said property was brought in the common hotchpotch, the first appellate Court, therefore, rejected the case of the plaintiff that the said property was a joint family property. The appellate Court in so far as the said issue of locus standi was concerned concluded that in the light of the said conspectus of facts the plaintiff cannot be said to have any locus-standi to question the auction sale of the mortgaged property qua which he did not have any right. Since the said issue goes to the root of the matter, as regards the maintainability of the proceedings filed by the plaintiff, other issues though decided against the defendants, therefore, pale into insignificance. 6. The first appellate Court also on the aspect, whether the suit was maintainable in view of the fact that notice under Section 164 was not given, reversed the finding of the trial Court. It is significant to note that in so far as the said aspect is concerned, the trial Court in a very cryptic manner has held that the suit was maintainable solely on the ground that the notice though styled one under Section 80 of the Code of Civil Procedure read with Section 164 of the Co-operative Societies Act was served on the concerned respondents. The first appellate Court considered the statutory provision and in view of the fact that Section 164 contemplates a notice to be given to the Registrar of the Co- operative Societies Maharashtra and in the instant case the same not being done as also in view of the fact that there was no specific pleading 7 in the suit that such a notice under Section 164 has been given which is contemplated by the said provision came to a conclusion that the notice under Section 80 read with Section 164 cannot be said to be a notice under Section 164 of the Co-operative Societies Act. 7. The first appellate Court, therefore, on the aforesaid two counts held the suit as not maintainable and therefore, though the auction sale was held to be suffering from procedural defects the first appellate Court dismissed the suit filed by the plaintiff. 8. On behalf of the appellant, the learned counsel reiterated the submissions which were advanced before the first appellate Court as regards the maintainability of the suit which, interalia, involves the locus-standi of the plaintiff, as also as regards the notice under Section 164. The learned counsel Shri Dixit would contend that the notice to the District Deputy Registrar would have to be held as good in view of the notification dated 1st July, 1981 wherein the powers of the Registrar and his subordinates have been declared by the State Government. The learned counsel drew my attention to Item No.3 wherein powers of District Deputy Registrar are elaborated. In the exception clause in respect of which the District Deputy Registrar cannot exercise powers, Section 164 does not find place and therefore, it is the submission of the learned counsel that the District Deputy Registrar is entitled to receive the said notice. The learned counsel to buttress his submission relied 8 upon a judgment of the Division Bench of this Court, reported in 2003 Mh.L.J. 853 in the matter of Madhav Bapurao Wagh .. Vs. State of Maharashtra & oth. The said judgment concerns Section 731D of the Maharashtra Co-operative Societies Act and the Division Bench, relying upon a similar notification dated 07.08.1993, has held that initiation of the proceedings for 'no confidence' under the said provision by the District Deputy Registrar cannot be said to be illegal in view of the notification spelling out the powers of the District Deputy Registrar which in that case also did not exclude the power under Section 731D. In so far as the aspect of locus-standi is concerned, the learned counsel Shri Dixit would contend that even in the self acquired property son has a right though an unequal right. The learned counsel placed reliance on the judgment of the Apex Court, reported in AIR 1953 SC 495 in the matter of Arunachala Mudaliar Vs. Muruganatha Mudaliar in support of his said contention. 9. Per contra, Mr. Manohar, the learned counsel appearing for the Bank submitted that though both the Courts have held that there is procedural infirmity in the action of auction sale, nevertheless, both the Courts below have held that the plaintiff has failed to prove his locus standi to question the auction sale and that the suit is also held not maintainable as notice under Section 164 has not been given. The learned counsel would contend that in view of the admitted position by virtue of the averments in paragraph 2 of the plaint the mortgaged 9 property being self acquired property of the father the plaintiff could not have any right qua the said mortgaged property. The learned counsel insofar as the aspect of notice is concerned, drew my attention to Section 164 and the requisites mentioned therein the learned counsel submitted that admittedly there is no averment in the plaint that the notice under Section 164 is given. The learned counsel submitted that the object of the notice under Section 164 is that the Registrar who receives the notice has opportunity to resolve the dispute, if possible. The learned Counsel lastly contended that the filing of the suit is an attempt to stall the recovery of the amount and the father who was the debtor has put up the plaintiff as he himself cannot file any proceedings in view of the compromise Award. 10. Having heard the learned counsel for the parties, in my view, there is no merit in the above Second Appeals. In so far as the aspect of locus-standi is concerned, though the said issue was sought to be raised for the first time in the first appellate Court, it is required to be noted that in the light of the averment in the plaint that the said Ravindrabhai who was the mortgagor had got the property by way of gift from his father Jivrajbhai, the question of locus-standi of the plaintiff was purely a question of law based on the said factual position. In my view, therefore, the first appellate Court was right in allowing the Bank to raise the issue in the first appellate Court for the first time as the said issue goes to the very root of the matter. The plaintiff, as observed by 10 the first appellate Court, has failed to substantiate his case that the mortgaged property was a joint family property, as the plaintiff did not adduce any evidence in that behalf. In my view considering the facts of the present case there is substance in the contention of the learned counsel for the respondent bank that the plaintiff has been put up by his father to challenge the auction sale proceedings as he himself cannot do so having entered into a compromise award with the bank. 11. Insofar as the issue of notice under Section 164 is concerned, the trial Court, apart from dealing with the said issue in a very cryptic manner has gone on to hold that the notice issued under Section 80 of the Code of Civil Procedure read with Section 164 would tantamount to a notice under Section 164 of the Maharashtra Co-operative Societies Act. The trial Court has in a way glossed over the statutory provision inasmuch as the said provision requires that the averment has to be there in the plaint that such a notice under Section 164 was given which is sorely lacking, in the instant case the said notice has also not been served on the Registrar of Co-operative Societies. The reliance placed by the learned counsel for the appellant on the notification dated 1st July, 1981, in my view, is misplaced. The said notification spells out the powers which are reposited in the various authorities under the said Act. That would not mean that a lower authority to the Registrar is 11 entitled to receive a notice that would beg question as to whether a person can issue a notice under Section 164 on any authority right from the Assistant Registrar to the Registrar merely because the notification discloses the reposition of the powers under the said Act. In my view, therefore, the submission of the learned counsel for the appellant cannot be countenanced in the teeth of the said statutory provision. Even assuming that the notice is valid, it would not further the case of the plaintiff in any manner, as the plaintiff has failed to prove his locus- standi to file the suit. 12. Since the Appeals question the findings on the issue as regards the locus-standi and the issuance of the notice under Section 164 in the teeth of the findings of the first appellate Court, on the questions of fact as well as law, in my view, no substantial question of law arises for consideration in the above appeals, which are, accordingly, dismissed. JUDGE RR..