1. Suit for declaration of sale deeds as null and void — Alleged prohibition of transfer under Section 49 of the Gujarat Co-operative Societies Act, 1961. (Para 1 )
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1997 Supreme(SC) 995
1997(7) Supreme 46
SUPREME COURT OF INDIA
S.B. Majmudar & D.P. Wadhwa, JJ.
Sindav Hari Ranchhod -Appellant
versus
Jadev Lalji Jaymal & Ors. -Respondents
Civil Appeal No. 2848 of 1979.
Decided on 23-7-1997.
Counsel for the Parties:
For the Appellant: H.S. Parihar, Advocate.
For the Respondents: M.J.S. Rupal, U.A. Rana, Sudhanshu Tripathi, and Ashok Tiwari, Advocates.
Important Points
A third party cannot challenge sale transactions under Section 49 of the Gujarat Co-operative Societies Act, 1961, if the Co-operative Society, the intended beneficiary of the statutory restriction, is not joined as a party and has not contested the transactions.
Subject
Civil Law - Property Law
Act Referred
Headnote
(i) Gujarat Co-operative Societies Act, 1961-Section 49-Suit for declaration that sale deeds executed by father of plaintiff were null & void for a liability of charge in favour of Society on seller-No evidence was led to show that Section 49(2) got attracted-Plaintiffs could not be given a second innings just for asking-There was no occasion for High Court for ordering any remand-Suit ought to have been dismissed. (Para 8)
(ii) Civil Procedure Code, 1908-Order 41 Rule 4-High Court remanded the case considering legality of sale transactions in favour of appellant and respondent No. 16-No appeal filed by respondent No. 16-Decision in favour of appellant will have a direct bearing on question of remand for considering plaintiff s challenge against transaction in favour of respondent No. 16 -Both appellant and respondent No. 16 had common defence against plaintiff s case-Fit case to exercise power under Order 41 Rule 4 r/w Art. 142 of Constitution to dismiss suit against respondent No. 16 also. (Para 9)
Legal Category Hierarchy
Table of Contents
2. Whether third parties can challenge sale transactions based on statutory prohibitions benefiting a co-operative society without joining the society as a party. (Para 6 , 7 )
3. A challenge based on statutory rights of a co-operative society requires the society's presence as a party to determine waiver or variation of obligations. (Para 8 )
4. Third parties cannot invoke statutory prohibitions intended for the benefit of a co-operative society without joining the society as a necessary or proper party. (Para 8 )
5. Appeal allowed — High Court remand order set aside — Suit dismissed against defendants. (Para 10 )
6. Can a third party challenge a sale deed based on a statutory charge in favor of a co-operative society if the society is not a party?
No. The court held that since the statutory right under Section 49 of the Gujarat Co-operative Societies Act is for the benefit of the society, the society must be joined as a party to determine if it waived or varied the obligation. (Para 8 )
7. What is the effect of Order 41 Rule 4 of the CPC when multiple defendants share a common defense?
Where a decree proceeds on a ground common to multiple defendants, an appeal by one defendant may result in the appellate court reversing or varying the decree in favor of all similarly situated defendants. (Para 9 )
8. Does the failure to lead evidence on the applicability of a statutory prohibition justify a remand for fresh decision?
No. If the plaintiffs have full opportunity during the trial but fail to lead clear evidence to support their plea, they cannot be granted a second innings via remand. (Para 8 )
ORDER
This appeal is moved by original defendant No. 15 in Special Civil Suit No. 20 of 1968 filed by the respondents-plaintiffs in the court of the learned Civil Judge, Senior Division, Surendra Nagar, for a declaration that the sale deeds executed by their father, defendant No.1 were null and void and are not binding on them as defendant No. 1, their father was addicted to bad habits and the transactions entered into by him in favour of the purchasers concerned were tainted with illegality and immorality. Learned trial Judge recorded evidence offered by the parties and came to the conclusion that there was nothing illegal or immoral about the said transactions and they were binding on the plaintiffs as their father out of necessity had entered into those transactions. So far as the present appellant, defendant No.15 is concerned, he is said to have purchased two pieces of agricultural lands being Survey Nos. 1292/2/3. This sale transaction in his favour was of January 27, 1965. Similar sale transaction was entered into by Defendant No. 1 relating to survey No. 803 on May 4, 1965 in favour of the respondent No. 16 herein. By amendment to the plaint the original plaintiffs introduced paragraph 15-A as under:
"15-A. Further it is submitted that whereas defendant No. 1 executed sale deeds in favour of the defendants at that time, there was a liability of charge in favour of Rampara Seva Sahakari Mandali and on the dates of the sale deeds defendant No. 1 had not repaid the loan taken by him so there was a prohibition under law to sell the said lands or to transfer in any manner and so also the sale deeds in favour of defendants were null and void under law and so the defendants have not acquired any right on the suit lands by virtue of such sale deeds."
2. The averments in the said paragraph were contested by the present appellant and other contesting defendants contending as under:
"3. Further it is to be submitted that whatever the debt of Rampara Seva Sahakari Mandali were paid up and so there is no charge of Rampara Seva Sahakari Mandali remained.
4. We deny the contention of the plaintiff that there was a prohibition under law from selling or transferring in any other manner, to the father of the plaintiff and so the sale deed executed by him is void. And further we submit that only Rampara Seva Sahakari Mandali and at the best Jaymal Deva have right to raise such disputes i.e. to cancel the said sale deeds. But the sons, daughters of the said Jaymal Deva i.e. to the plaintiffs have no right to raise such disputes and so plaintiffs are not entitled to raise such disputes.
5. Further when no amount is due to Rampara Seva Sahakari Mandali now no question remains regarding whether sale is void or not."
3. In the light of the aforesaid pleadings of the parties an issue was struck by the trial court being Issue No. 6A which reads as under :
"Whether the Plaintiffs are legally entitled to take the contention averred in para 15A of the Plaint? If yes, whether the Plaintiffs prove the averments made in para 15A of the Plaint? If yes, what is its effect ?"
4. After recording evidence on this issue learned trial Judge came to the conclusion that the plaintiffs were legally entitled to take up the contention averred in paragraph 15A. However, on the second part of the issue, it was held that the plaintiffs could not prove the averments made in paragraph 15A of the plaint and consequently, the third part regarding the effect of the decision on the said issue of the suit was found to be not surviving. In this connection, the learned Judge after noting Section 49(1) (d) & (e) of the Gujarat Co-operative Societies Act, 1961, observed as under:
"It is for the Cooperative institutions concerned to take up this dispute, that even after the alienations were made, the evidence on record does show that from the two alienees, the Defendant No. 12 and the Defendant No. 15, the Rampara Cooperative Society had accep
