Back
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. SOUNTHAR, J.
M. Chitra – Appellant
Versus
The Deputy Registrar of Cooperative Societies, Dharmapuri & Another – Respondents
W.P No. 4671 of 2023 & WMP. Nos. 4673 & 4676 of 2023
Decided On : 20-07-2023
Attachment - Tamil Nadu Cooperative Societies Act, 1983 - Section 167(2) - [Section 167(2)] - The court quashed the conditional attachment order passed under Section 167(2) of the Tamil Nadu Cooperative Societies Act, 1983, holding that the first respondent cannot attach the properties of a stranger when the property stood in the name of the petitioner, who is a third party stranger. The court cited a previous order in a similar circumstance, emphasizing that unless the provision of the Cooperative Societies Act or Rules framed therein contemplate a statutory fiction or presumption in favor of the society to proceed against the property of a stranger, the attachment order cannot be sustained.
Fact of the Case:
The petitioner challenged a conditional attachment order passed under Section 167(2) of the Tamil Nadu Cooperative Societies Act, 1983, in respect of her properties, claiming that she is not an employee or member of the Cooperative Society and that the first respondent had no power to attach her property as she is a bonafide purchaser without notice.
Finding of the Court:
The court quashed the conditional attachment order, stating that the first respondent cannot attach the properties of a stranger when the property stood in the name of the petitioner, who is a third party stranger. The court emphasized that the first respondent is expected to proceed against the properties of the delinquent employees in accordance with the law.
Issues: The main issue was whether the first respondent had the power to attach the petitioner's property under Section 167(2) of the Tamil Nadu Cooperative Societies Act, 1983, even though the petitioner was not an employee or member of the Cooperative Society.
Ratio Decidendi: The court held that the first respondent cannot attach the properties of a stranger when the property stood in the name of the petitioner, who is a third party stranger, citing a previous order in a similar circumstance.
Final Decision: The Writ Petition was allowed, and the conditional attachment order was quashed. The first respondent was directed to proceed against the properties of the delinquent employees in accordance with the law. No costs were awarded, and the connected Miscellaneous Petitions were closed.
Key Points: - The court quashed a conditional attachment order under Section 167(2) where the property was held by a third party stranger (!) (!) . - An attachment order cannot be sustained against a stranger’s property unless the Act or rules contemplate a statutory fiction or presumption in favor of the society (!) (!) . - The petitioner, not being an employee or member, had no obligation to respond to attachment proceedings initiated against cooperative society employees (!) (!) . - The property was in the petitioner’s name and purchased before the initiation of proceedings against the delinquent employees (!) (!) . - The first respondent was expected to proceed only against properties of delinquent employees in accordance with the law (!) (!) . - The Writ Petition was allowed, quashing the attachment order and directing proper proceedings against the employees’ properties (!) (!) . - No costs were awarded and connected miscellaneous petitions were closed (!) (!) .
JUDGMENT
(Prayer: Writ Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Certiorarified Mandamus, calling for the records of the conditional attachment order passed by the first respondent dated 01.09.2022 under Section 167(2) Tamil Nadu Cooperative Societies Act, 1983 quash the same and consequently direct the respondents to raise the order of attachment made in Survey Nos.306/1C, 306 /3C and 306/5C measuring 1.62 hector at Sikkalur Village, Harur Taluk, Dharmapuri District.)
1. The petitioner has come up with this Writ Petition challenging the conditional attachment order passed by the first respondent dated 01.09.2022 under Section 167(2) Tamil Nadu Cooperative Societies Act, 1983, in respect of the properties of the petitioner in S.Nos.306/1C, 306/3C and 3036/5C measuring about 1.62 hector situated at Sikkalur Village, Harur Taluk, Dharmapuri District.
2. According to the petitioner, she is the absolute owner of the property in S.Nos.306/1C, 306/3C and 3036/5C measuring about 1.62 hector situated at Sikkalur Village, Harur Taluk, Dharmapuri District. She purchased the said property from one Kavitha and Latha for a valuable consideration of Rs.8,49,000/- by a registered sale deed dated 09.06.2022. It is also stated by the petitioner that she has been in possession and enjoyment of the said property.
3. It is the further case of the petitioner that when she got encumbrance certificate form Government website on 03.10.2022, it came to her knowledge that the first respondent had attached her property by invoking power under Section 167(2) of the Tamil Nadu Cooperative Societies Act. The impugned conditional attachment order passed by the first respondent was challenged by the petitioner mainly on the ground that the petitioner is not an employee or member of the said Cooperative Society and when no action is contemplated against the petitioner, the first respondent is not entitled to attach her property. It is the specific case of the petitioner that the first respondent has no power to attach the property of the strangers. It is also stated by the petitioner that she is a bonafide purchaser and therefore, without notice no proceedings can be initiated by the first respondent.
4. The first respondent filed a detailed counter resisting the Writ Petition mainly on the ground that during regular inspection certain financial irregularities were noticed in the Dharmapuri District, Central Cooperative Bank Limited and hence, the Registrar of the Cooperative Society constituted a committee. The said committee conducted inspection on 30.06.2022 and found certain financial irregularities. Therefore, the first respondent ordered statutory enquiry under Section 81 of the Tamil Nadu Cooperative Societies Act, 1983. In the mean time, one Kannan, who is the Secretary of the Society and Ponniya, who is a Senior Clerk, were placed under suspension. The society filed an Arbitration claim for a sum of Rs.2,39,00,000/- under Section 90 of the Cooperative Societies Act against the said Kannan and Ponniya. The said society also submitted a representation on 30.08.2022 seeking conditional attachment of the immovable properties of Kannan and Ponniya under Section 167 of the said Act. Therefore, in order to safeguard the funds of the society and in public interest, the impugned conditional order of attachment was passed in respect of the properties of one Latha, who is the wife of the said Kannan and one Kavitha, who is the wife of the said Ponniya.
5. It is also stated that the vendors of the plaintiffs namely Kavitha and Latha purchased the property out of the illegally gotten money of the delinquent employees namely Kannan and Ponniya.
6. The learned counsel for the petitioner mainly assailed the order passed by the first respondent on the ground that the petitioner is a stranger and when certain proceedings were initiated under Section 90 of the said Act, against the employees of the Cooperative Society, it is not
AI
The main legal point established in the judgment is that unless the provision of the Cooperative Societies Act or Rules framed therein contemplate a statutory fiction or presumption in favor of the s....
A purchaser’s property cannot be attached for another's debts if they are not a party to the debt proceedings.
A spouse's property cannot be attached in surcharge proceedings against the other spouse unless it is proven that the property was purchased with misappropriated funds.
Attachment under Section 167(2) of Tamil Nadu Cooperative Societies Act limited to property of person inquired under Section 87, not spouse.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
