Kristachar Gurachar Galgali vs Shivangaowda Kenchanagowda, Police patil Dead by L.Rs.

1. The appellant-plaintiff instituted a suit for specific performance and permanent injunction. The suit was decreed by the trial court. The first appeal filed by the respondent-defendant was dismissed by the Learned District Judge. The High Court, however, reversed the judgments of the two courts below and dismissed the suit by allowing the second appeal. This appeal by way of special leave is against the judgment of the High Court.

2. According to the appellant, the respondent, being the owner of the suit property, entered into an agreement dated June 2, 1968 to sell the suit land for Rs. 9,160/-. Sura of Rs. 7,160/- was paid as advance and the balance amount was to be paid before the Sub-Registrar at the time of the execution of the sale deed. The possession of the suit land was delivered to the appellant. The respondent, on the other hand denied the allegations and stated that the agreement was not intended to be acted upon as it was by way of security for the amount of Rs. 3,1607- advanced to him by the appellant. The trial court and the lower appellate court, on appreciation of the evidence, decreed the suit of the appellant

3. The High Court proceeded on the assumption that on the date of the agreement the suit property was subject to a charge in favour of the cooperative society of which the respondent-defendant was a member and as such the sale of the suit land was void by virtue of the provisions of Section 33 of the Karnataka Cooperative Societies Act, 1959 (the Act). On this ground alone the High Court set aside the judgments of the courts below.

4. The learned Counsel for the parties have taken us through the judgment of the High Court and of the lower appellate court. We are of the view that the High Court was not justified in reaching the conclusion that the respondent-defendant was indebted to the society on the date of the agreement and as such the agreement to sell was void being hit by the provisions of Section 33 of the Act. The point, based on Section 33 of the Act, was not argued before the lower appellate court-rightly so- because it was neither pleaded nor evidence led to show that the respondent-defendant was indebted to the society on the date of agreement. The lower appellate court observed as under: -

Further it has not been mentioned in the written statement what amount was due to the society and what was the taqavi loan. It has also not been mentioned what was the amount of house tax to be paid by the defendant....The defendant has also not stated in his evidence that what amount was due to the society and what was the Taqavi loan. The evidence of DW2 is also to the same effect.

5. While hearing arguments on December 10, 1992 we adjourned the case to January 15,1993 and thereafter to February 11,1993 to enable the learned Counsel for the respondent-defendant to find out as to whether the loan taken from the society was paid back and if not what was the amount due on the date of agreement. In spite of two months time given to the learned Counsel he was not in a position to satisfy us that on February 6, 1968 when the agreement was entered into between the parties, the respondent-defendant had not paid back the loan taken from the society. The learned Counsel, however, placed on record the statement of DW5 the secretary of the society wherein he has deposed as under:

Defendant had taken loan of Rs. 600/- prior to 1961 as per the records of our society. The deft has taken loan of Rs. 700/- on 16.6.72. Deft had filed an application for grant of loan. It is at Ex.D.23. The deft had also executed a bond. It is at Ex.D.24. Deft has also executed a deed of declaration in which the land of the deft are mortgaged to our society. The loan of 1961 is completely discharged by 1.6.72. I remember to have gone to the defts house for attachment of movables towards the recovery society dues in 1971-72.

The statement reproduced above does not help the respondents. The statement does not show whether the respondent-defendant was indebted to the society on the date of the agreement We agree with the findings of the lower appellate court that there were no pleadings on the point and no evidence was led.

6. There being no factual base in existence the question of applicability or interpretation of Section 33 of the Act does not arise. We are not expressing any opinion either way on the interpretation of Section 33 of the Act

7. We allow the appeal, set aside the judgment of the High Court and restore that of the trial court decreeing the suit of the appellant-plaintiff. No costs.