Point of law: Amendment of plaint – Time barred suit - If the plaintiff were to file a suit for possession now, it having lost its possession in the year 2004 itself, cannot bring a suit within the realm of either Article 64 or 65 of the Limitation Act. Even if the suit is filed, it will be clearly time barred

JUDGMENT :

SREENIVAS HARISH KUMAR, J.

The plaintiff has assailed the judgment of the III Addl. Sr. Civil Judge, Hubballi, in O.S.No.141/2012. The subject matter of the suit is five plots in all measuring 29 guntas 9 anas out of 2 acres 1 gunta 8 anas in block no. 281/1A of Bhairidevarakoppa, Hubballi (hereafter referred to as ‘suit property’). He sought two relief’s of declarations, firstly that the auction conducted by the first defendant with respect to suit property was illegal and void, and secondly that the sale deed dated 23.08.2007 executed by the first defendant in favour of the second and third defendants was sham, nominal and null and void; and did not bind his interest.

2. The plaintiff is a co-operative society involved in manufacture and sale of agricultural implements. It was carrying on its business in the suit property. For its business activities, it availed loan of Rs. 9,00,000/-from Karnataka State Financial Corporation i.e. the first defendant on the security of the suit property, and a sum of Rs. 50,00,000/-from Karnataka Central Co-operative Bank, Hubballi (‘KCC Bank’ for short), second charge was created on the suit property for this loan.

3. As the plaintiff became a chronic defaulter, the first defendant exercised the statutory power under Section 29 of the State Financial Corporation Act (for short, the ‘Act’), took over the possession of the suit property and brought it for auction. In the first sale held in the year 2005, the suit property was auctioned for Rs. 54,00,000/-, but the purchaser defaulted to deposit the money and therefore the sale was cancelled. Again sale was held on 23.08.2007 and the defendants No.2 and 3 purchased the suit property for Rs. 30,00,101/-.

4. The plaintiff’s case is that the suit property was capable of fetching more than Rs. 1,00,00,000/-at the time when the second sell was held. In the year 2000 itself, its value was more than Rs. 80,00,000/-. Since in the first sale, the offer was for Rs. 54,00,000/-, the second sale could not have been accepted for Rs. 30,00,000/-. The amount due to the first defendant in the year 2007 was Rs. 3,30,000/-and that the Karnataka Central Co-operative Bank had in fact written a letter to the first defendant that it would clear the dues of first defendant as it has got second charge. Complaining that the sale in favour of second and third defendant was illegal as it was intentionally sold for a less amount, the plaintiff instituted the suit for the reliefs aforementioned.

5. The first defendant, in its written statement, contended that it exercised its power under Section 29 of the Act. Admitting that the suit property was earlier auctioned for Rs. 54,00,000/-, it stated further that the purchaser failed to remit the sale price and consequently the sale was cancelled and the EMD amount of Rs. 25,000/-deposited by the purchaser was forfeited. It denied the plaint averment that the KCC Bank came forward to clear its dues. It refuted the allegations that it did not follow procedure prescribed before conducting auction, in this regard it is stated that it issued paper publications in five newspapers, the last one was published on 03.12.2006 in Kannada Daily, ‘Samyukta Karnataka’. The plaintiff was offered an option to bring a purchaser who could purchase the suit property for the best price. At that time the plaintiff did not show any interest. The plant and machinery installed in the suit property was sold for Rs. 1.65 lakhs and the sale proceeds, credited to the loan account of the plaintiff. It took over the possession of the suit property long back. There was no irregularity in conducting second sale.

6. The third defendant filed his written statement separately, supported the first defendant in entirety and further specifically contended that the suit was time barred.

7. The trial court raised seven issues, the findings of the trial court on the first three issues are relevant for discussion in this appeal. The plaintiff examined two witnesses