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2024 Supreme(Online)(KER) 32013
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE N.NAGARESH TUESDAY, THE 24TH DAY OF SEPTEMBER 2024 / 2ND ASWINA, 1946 WP(C) NO. 23060 OF 2024 PETITIONER:
THE WEST CHALAKUDY SERVICE CO-OPERATIVE BANK LTD.
NO.R 262, REPRESENTED BY ITS SECRETARY, CHALAKUDY P.O, THRISSUR DISTRICT., PIN – 680307.
BY ADVS.
ARJUN RAGHAVAN T.R.HARIKUMAR POOJA PANKAJ RESPONDENTS:
1 THE SPECIAL SALE OFFICER WEST CHALAKUDY SERVICE CO-OPERATIVE BANK GROUP, OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), CHALAKUDY, THRISSUR DISTRICT., PIN – 680307.
2 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL) CHALAKUDY, OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), CHALAKUDY, THRISSUR – 680307.
3 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF JOINT REGISTRAR OF CO-
OPERATIVE SOCIETIES (GENERAL), THRISSUR, SAHAKARANA BHAVAN, AYYANTHOLE P.O, THRISSUR DISTRICT., PIN - 680003 ADDL.R4 THE TAHSILDAR TALUK OFFICE, CHALAKUDY, THRISSUR DISTRICT – 680307.
[ADDITIONAL 4TH RESPONDENT IS IMPLEADED AS PER ORDER DATED 17.07.2024 IN I.A.NO.1/2024 IN WPC NO.23060/2024.]
BY ADV.SMT. SHEEJA C.S, SR.GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.09.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
CR N. NAGARESH, J.
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W.P.(C) No.23060 of 2024 `````````````````````````````````````````````````````````````
Dated this the 24th day of September, 2024
J U D G M E N T
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The West Chalakudy Service Co-operative Bank Limited has filed this writ petition seeking to quash Ext.P14 and to direct the 3rd respondent-Joint Registrar to issue sale confirmation of the auction conducted pursuant to Exts.P3 and P4 Awards, as discernible from Exts.P5 to P7 documents.
2. The petitioner is a Co-operative Society functioning under the provisions of the Kerala Co-operative Societies Act, 1969. The petitioner is a Primary Agricultural Credit Society. One Smt.Sheela, a member of the Society, availed a credit facility of ₹8,00,000/-. Her husband, Sri.Rajan, stood as guarantor. The loan was availed in the month of March, 2014, mortgaging five cents of property of Sri.Rajan. The said Rajan also availed a credit facility of ₹15 lakhs, pledging the same property. When the borrowers failed to repay the loan amount, the petitioner preferred Arbitration Cases. The Arbitration Court passed Exts.P3 and P4 Awards in ARC Nos. 2431 and
2440 of 2017.
3. The petitioner thereafter initiated Execution Proceedings. The property was put to sale. The property was purchased by the petitioner-Society in public auction, for an amount of ₹51,23,140/-. The petitioner was then informed that there is a pending payment of ₹1,56,576/- from Sri.Rajan towards the Motor Vehicle Department, Government of Kerala on account of which there is a charge over the property. The petitioner states that though Section 36A of the Kerala Co- operative Societies Act provides for prior charge to the petitioner-Society, the Society paid the said amount in order to get the Sale Confirmation issued.
4. In order to get confirmation of sale, the entire files were forwarded to the 3rd respondent-Joint Registrar. The 3rd respondent thereupon issued Ext.P14 communication dated 25.05.2024, wherein the Joint Registrar has stated that Sale Confirmation would be issued once the petitioner-Society procure No Objection Certificate from the Tahsildar, Chalakudy certifying that there is no pending dues towards the property. The petitioner thereupon submitted Ext.P15 request to the Tahsildar seeking to issue No Objection Certificate. The Tahsildar, however, has not issued the No Objection Certificate.
5. The petitioner states that Ext.P14 communication of the Joint Registrar requiring the petitioner to produce a No Objection Certificate from the Tahsildar for the purpose of confirming the sale, is highly illegal and unwarranted. Section 36A of the Kerala Co-operative Societies Act provides for prior charge of a mortgaged property with the Society. Neither the Co-operative Societies Act nor the Kerala Co-operative Societies Rules empowers the Registrar / Joint Registrar to demand a No Objection Certificate from the Tahsildar, for the purpose of confirming sale of a property sold under the provisions of the Kerala Co-operative Societies Act and the Rules.
6. Counsel for the petitioner argued that under Rule
83(3) of the Kerala Co-operative Societies Rules, if no application to set aside a sale is made within 30 days from the date of sale, the Registrar shall confirm the sale. The Rule does not provide any other circumstance in which Registrar can refuse to confirm a sale.
7. The counsel for the petitioner further pointed out that in Nahala v. Adish and others [ILR 2019 (1) KER 264], this Court has held that Section 36A of the Kerala Co- operative Societies Act, 1969 creates special charge on movable or immovable property of the borrower, in favour of the Society, on the borrower executing Gehan, which has all the characteristic features of a mortgage under the provisions of the Transfer of Property Act. When Section 36A provides for a special charge, it is obvious that a charge created by a decree cannot prevail over Gehan / mortgage.
8. The 3rd respondent resisted the writ petition filing a statement. The 3rd respondent stated that the petitioner granted a Mortgage Loan to Sheela for ₹8 lakhs on 29.03.2014 and another Mortgage Loan of ₹15 lakhs to
