The Karnataka State Khadi and Village Industries Workers HBCS Limited vs Anand

P.S. Dinesh Kumar, J.—These four writ petitions are filed by Karnataka State Khadi and Village Industries Workers HBCS Limited represented by Sri N. Lingaraj:

(i) In W.P. Nos. 30024 and 30025 of 2016, the petitioner has challenged the order dated 17-10-2015 on I.A. No. 5 (Annexure-G) in O.S. No. 2279 of 2014 on the file of XX Additional City Civil and Sessions Judge, Bengaluru City (CCH-32) filed under Order I, Rule 10(2) of Civil Procedure Code, 1908 and the order dated 12-4-2016 (Annexure-Q) on a memo filed in the said suit;

(ii) In W.P. Nos. 30027 and 30028 of 2016, the petitioner has challenged the order dated 17-10-2015 on I.A. No. 7 (Annexure-G) in O.S. Np. 1532 of 2014 on the file of XX Additional City Civil and Sessions Judge, Bengaluru City (CCH-32) filed under Order I, Rule 10(2) of CPC and the order dated 12-4-2016 (Annexure-Q) on a memo filed in the said suit;

(iii) In W.P. Nos. 30029 and 30030 of 2016, the petitioner has challenged the order dated 17-10-2015 on I.A. No. 7 (Annexure-G) in O.S. No. 1529 of 2014 on the file of XX Additional City Civil and Sessions Judge, Bengaluru City (CCH-32) filed under Order I, Rule 10(2) of CPC and the order dated 12-4-2016 (Annexure-Q) on a memo filed in the said suit;

(iv) In W.P. Nos. 30034 and 30035 of 2016, the petitioner has challenged the order dated 17-10-2015 on I.A. No. 7 (Annexure-G), in O.S. No. 1534 of 2014 on the file of XX Additional City Civil and Sessions Judge, Bengaluru City (CCH-32) filed under Order I, Rule 10(2) of CPC and the order dated 12-4-2016 (Annexure-Q) on a memo filed in the said suit.

In these four batches of writ petitions disposed of by this common order, petitioner is a House Building Co-operative Society represented by one N. Lingaraj claiming to be the elected President. Two impugned orders mentioned in detail above namely order dated 17-10-2015 (Annexure-G) and order dated 12-4-2016 (Annexure-Q) are common in all these writ petitions.

Heard Sri M.B. Chandrachooda, learned Counsel appearing for the petitioner and Sri Zulfikir Kumar Shafi, Sri Mallanna K. and Sri Venkatesha Murthy, learned Counsel appearing for the respondents.

Though these matters are listed to consider I.A. No. 1 of 2016 for vacating stay, at the joint request of learned Counsel appearing for both parties, the same are taken up for final disposal.

Sri Zulfikir Kumar Shafi, learned Counsel for respondents and applicants in I.A., to vacate the interim order of stay submits that issue involved in all these writ petitions is common in nature. The Karnataka State Khadi and Village Industries Workers House Building Co-operative Society Limited represented by N. Lingaraj is the petitioner. It has entered into agreements with various landowners. W.P. Nos. 30024 and 30025 of 2016 is filed challenging the orders passed on the interlocutory applications in O.S. No. 2279 of 2004. The predecessors of respondents 3 and 4 were the owners of the lands. They had agreed to convey their lands in favour of petitioner-Society.

The lands in question were notified by the Bengaluru Development Authority (''BDA'' for short) for formation of ''Arkavathy Layout''. Petitioner-Society filed objections and there were several correspondences between the petitioner-Society and BDA. Finally, the lands acquired were denotified.

The respondents 1 and 2 filed the instant suit for a judgment and decree to declare that the registered agreement to sell dated 27-7-1992 is void in law contending inter alia that they are members of Hindu Joint Family and coparceners. Their father did not have any legal right to sell the joint family property. The 3rd respondent along with his deceased brother succeeded in getting the agreement executed in favour of the Society. Therefore, the agreement to sell in favour of the petitioner-Society by their father R. Nagaraj is bad in law.

During the pendency of the said suit, the petitioner-Society has filed I.A. No. 4 under Order 6, Rule 17 read with Section 151 of CPC for amendment of written statement. In the meanwhile, respondent 5-N. Lakshman was appointed as the Administrator of the petitioner-Society on 14-7-2015. The said Administrator filed another application (I.A. No. 5) under Order I, Rule 10(2) read with Section 151 of CPC, dated 13-8-2015 for impleadment of Society, represented by the Administrator as one of the defendants. The said I.A. No. 5 was allowed vide order dated 17-10-2015 (Annexure-G). After his tenure, as Administrator came to end, he was appointed a Special Officer by order dated 20-2-2016 as per Annexure-M.

The Special Officer filed a memo dated 12-4-2016 before the Trial Court seeking dismissal of said I.A. No. 4 filed by the Society under Order 6, Rule 17 of CPC ''as not pressed''. Based on the said memo, I.A. 4 filed by the petitioner-Society was dismissed by the Trial Court vide order dated 12-4-2016 (Annexure-Q).

In sum and substance, Sri Zulfikar Kumar Shafi, learned Counsel for respondents submits that the Society represented by one Sri N. Lingaraj has filed these writ petitions challenging the impugned orders has no authority to represent the petitioner-Society. Administrator is appointed by the Government and is lawfully entitled to look after the affairs of the Society. Therefore, the interim order passed in the writ petitions filed by an unauthorised person are liable to be dismissed. Accordingly, he prays for vacating the interim order and also to dismiss these writ petitions.

In reply, Sri Chandrachooda, learned Counsel appearing for the petitioner-Society submits that the land in question was sold to the Co-operative Society which was represented and managed by Sri N. Lingaraj, President. However, Sri Chandrachooda does not dispute the facts with regard to appointment of the Administrator and Special Officer.

Assailing the correctness of the orders passed by the Trial Court, Sri Chandrachooda submits that the Administrator was appointed on 14-7-2015. The instant IA, for impleadment was filed on 13-8-2015. The order of appointment of Administrator was challenged by filing writ petitions in Nos. 33832 and 33833 of 2015 before this Court. This Court vide order dated 17-8-2015 granted interim order staying the appointment of respondent 5 as an Administrator of the petitioner-Society. Therefore, he submits that the impleadment of the Administrator is unsustainable in law.

In reply, Sri Zulfikir Kumar Shafi, learned Counsel for the respondents submits that defendant 3-Society represented by its elected President filed a written statement. As there were serious allegations of irregularities, fraud and misappropriation levelled against the President of the Society, Sri N. Lakshman was appointed as an Administrator by the Joint Registrar of Co-operative Societies. Accordingly, the Administrator took over the management of the Society. The Society was rightly represented before the Trial Court through the said Administrator.

Further, he submits that the impugned order of dismissal of I.A. for amendment of written statement does not warrant any interference because, the said order has been passed on the basis of a memo filed by the Special Officer of the Society. Accordingly, he prays for dismissal of these writ petitions.

Sri Chandrachooda, learned Counsel for the petitioner placing reliance on the short notes of cases in the case of Rajaradhya v. Joint Director of Co-operative Society, 1974 (2) Kar. L.J. 4, in W.P. No. 2089 of 1973, contends that the appointment of the Administrator or the Special Officer is guided by the provisions of Sections 31 and 31-A of the Karnataka Co-operative Societies Act, 1959, I Administrator has to exercise his power in terms of provisions of Section 14 of the Karnataka Co-operative Societies Act. Neither the Administrator nor the Special Officer have any right to implead themselves as a party in a suit in their official capacity and to take a decision on behalf of the Society.

In reply, Sri Venkatesha Murthy, learned Counsel appearing for respondent 5-Administrator/Special Officer submits that a Special Officer may be appointed under Section 31 of the Karnataka Co-operative Societies Act. The powers and functions of a Special Officer are governed by Section 31(4) of the Act, which reads as follows:

"31. (4) The Special Officer shall, subject to the control of the Registrar, exercise and perform all the powers and functions of the board of the co-operative society or any office bearer of the co-operative society and take all such actions as may be required in the interest of the co-operative society."

I have given my careful consideration to the submissions of learned Counsel for the parties and perused the material papers.

Admittedly, appointment of Administrator was challenged in W.P. Nos. 43158 and 43159 of 2015, which have been dismissed as having become infructuous vide order dated 19-2-2016. An Administrator and Special Officer are appointed by the State Government to manage a Society, whenever the elected body cannot function. They step to the shoes of the management of Society. They shall be vested with all powers to effectively manage the Society. Therefore, there is no infirmity in the order passed by the Trial Court to implead Society represented by the Administrator. Further, it is also not in dispute that the Government appointed the Administrator on 14-7-2015. The application for impleadment was filed on 13-8-2015 and it was allowed on 17-10-2015. As on the date of the filing of the said IA for impleadment, the Administrator was in the office. The Society is a body corporate, which requires to be controlled and managed either by an elected body or administered by an officer appointed by the Government. Therefore, the order permitting impleadment of Administrator does not suffer from any legal infirmity. Further, the Special Officer is said to have been appointed in furtherance and in compliance directions of this Court in W.P. Nos. 43158 and 43159 of 2015. Perusal of order of appointment of Special Officer as per Annexure-M makes it clear that respondent 5 was appointed as a Special Officer under Section 31 of Karnataka Co-operative Societies Act. The Special Officer continued in the office in place of Administrator. It is not in dispute that on the date of filing the memo dated 12-4-2016, Special Officer was in charge of affairs of the Society. Based on the said memo seeking dismissal of I.A., for amendment of written statement, the Trial Court has dismissed the said application. Hence, there is no illegality or any legal infirmity in the order passed by the Trial Court.

In WP Nos. 30027 and 30028 of 2016, the case of the petitioner is that respondents 3 and 4 have executed registered agreement to sell their land dated 31-10-1989 in favour of the Society after receiving the full sale consideration. They had executed general power of attorney authorising the petitioner to deal with the property. The petitioner-Society has formed sites and executed sale deeds in favour of its members. The land in question was notified for acquisition by the BDA and thereafter denotified. Taking advantage of denotification, respondents 1 and 2, who are children of respondents 3 and 4 have filed O.S. No. 1532 of 2014 for a declaration that the agreement of sale dated 31-10-1989 is void.

In W.P. Nos. 30029 and 30030 of 2016, the case of the petitioner is that respondents 5 and 6 have executed registered agreements to sell their land dated 5-8-1992 in favour of the Society after receiving the full sale consideration. They had executed general power of attorney authorising the petitioner to deal with the property. The petitioner-Society has formed sites and executed sale deeds in favour of its members. The land in question was notified for acquisition by the BDA and thereafter denotified. Taking advantage of denotification, respondents 1 to 4, who are children of respondent 5 have filed O.S. No. 1529 of 2014 for a declaration that the agreement of sale dated 5-8-1992 is void.

In W.P. Nos. 30034 and 30035 of 2016, the case of the petitioner is that respondents 13 and 14 have executed registered agreement to sell their land dated 27-7-1992 in favour of the Society after receiving the full sale consideration. They had executed general power of attorney authorising the petitioner to deal with the property. The petitioner-Society has formed sites and executed sale deeds in favour of its members. The land in question was notified for acquisition by the BDA and thereafter denotified. Taking advantage of denotification, respondents 1 to 12, who are brothers and sisters of respondents 13 and 14 have filed O.S. No. 1534 of 2014 for a declaration that the agreement of sale dated 27-7-1992 is void.

Thus, the facts in W.P. Nos. 30027 to 30030,30034 and 30035 of 2016 are similar as in W.P. Nos. 30024 and 30025 of 2016. In all the cases, the agreements of sale have been executed in favour of the petitioner-Society after receiving the full sale consideration. Thereafter, the family members have filed the instant suits to declare the agreements as void in law. The Administrator was appointed on 14-7-2015. Thus, as on the date of filing of the I.A., for impleadment on 13-8-2015, the Administrator was in office. The Special Officer was appointed on 20-2-2016. As on the date of filing the memo seeking dismissal of the I.As., for amendment on 12-4-2016, the society was under the control of Special Officer. Hence, there is no legal infirmity in the orders passed by the Trial Court in allowing the applications for impleadment as also dismissing the I.As., for amendment based on the memo filed by the Special Officer.

In the result, these writ petitions do not merit any consideration and accordingly they are dismissed. No costs.

In view of dismissal of writ petitions, IA No. 1 of 2016 for vacating stay in all the petitions do not survive for consideration and the same are disposed of. No costs.