Registrar, may, unless adequate security is furnished, direct conditional attachment of the said property, and such attachment shall have the same effect as if it is made by a competent Civil Court.
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IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 26TH DAY OF FEBRUARY, 2018
BEFORE
THE HON'BLE Dr.JUSTICE VINEET KOTHARI
WRIT PETITION Nos.3336-3337/2018 (GM-CFA)
Between:
1. Vijaylakshmi Shankar
W/o Umashankar S
Aged about 53 years.
2. Sri. Umashankar
S/o Late M. Rudrappa
Aged 54 years.
Both are residing at No.58
6th Cross, 2nd Main
Sir M.V. Layout, Thindlu
Bangalore-560 097.
...Petitioners
(By Mr. Venkatesh H.N. Advocate)
And:
1. M/s. Rakshodaya Chits Pvt. Ltd.
No.1947/65, 1st Floor
2nd Main, 8th Cross
M.C. Layout, Vijaynagar
Bengaluru-560 040
Represented by its Forman
And Branch Manager
Sri. Chandrashekar M.L.
Aged about 42 years.
Date of Order 26-02-2018 W.P.Nos.3336-3337/2018
Vijaylakshmi Shankar & Anr. Vs.
M/s. Rakshodaya Chits Pvt. Ltd. & Anr.
2/11
2. Smt. G. Hemalatha
Husband's name not known
to the petitioner
Major
Nominee of Deputy Registrar
of Chits, 4th zone
Bengaluru District
Flat No.104, Celestial Apartment
2nd Block, 2nd Cross, BEL Layout
Vidyaranyapura
Bengaluru-560 097.
... Respondents
****
These Writ Petitions are filed under Article 226 of the
Constitution of India, praying to call for records of dispute
nos.DRB-4/chits/39/2017-18 and dispute No.DRB-
4/chits/40/2017-18 from the file of 2nd respondent and
orders passed by the second respondent at Annexure E and
F dated 16-12-2017 and peruse the same & etc.,
These Writ Petitions coming on for Preliminary Hearing
this day, the Court made the following:-
ORDER
Mr. Venkatesh H.N., Advocate for Petitioners The petitioner Mrs. Vijaylakshmi Shankar, W/o. Umashankar S. and her husband, Shri. Umashankar, S/o. Late M. Rudrappa, have filed these writ petitions in this Court on 19/01/2018 against M/s. Rakshodaya Chits Pvt.Ltd. and Smt. G. Hemalatha, Nominee of the Deputy Registrar of Chits against the impugned order Date of Order 26-02-2018 W.P.Nos.3336-3337/2018 Vijaylakshmi Shankar & Anr. Vs. M/s. Rakshodaya Chits Pvt. Ltd. & Anr. passed by the Respondent No.2 for attachment of immovable property of the petitioner No.2 - Sri. Umashankar S.
2. The impugned orders Annexure E dated 16/12/2017 and Annexure F dated 16/12/2017 have been passed by the Respondent No.2 against the petitioners under the provisions of Section 68(2) of the Chit Funds Act, 1982 attaching the scheduled property of the petitioner No.2 for the alleged non- payment by the petitioner No.1, wife, Smt. Vijaylakshmi Shankar of the chit amounts of `2,34,910/- and `2,83,021/- respectively under the said two orders.
3. The learned counsel for the petitioners has submitted before the Court that without giving any prior notice and opportunity of hearing to the petitioners, the impugned orders have been passed by the Respondent No.2 - the Nominee of the Deputy Registrar of Chits, 4th Zone, Bengaluru District, Bengaluru in two Disputes Date of Order 26-02-2018 W.P.Nos.3336-3337/2018 Vijaylakshmi Shankar & Anr. Vs. M/s. Rakshodaya Chits Pvt. Ltd. & Anr. brought by the Respondent No.1 - Chit Fund Company, M/s. Rakshodaya Chits Pvt.Ltd.
4. Having heard the learned counsel for the petitioners, this Court is satisfied that the present writ petitions have no merit and deserve to be dismissed.
5. Section 68 of the Chit Funds Act, 1982 ('Act' for short) provides for attachment before judgment and other Interlocutory Orders, whereas Section 69 of the said Act provides for decision by the Registrar or his Nominee.
6. The relevant provisions of Sections 68 and 69 of the said Act are quoted below for ready reference.
"68. Attachment before judgment and other interlocutory orders. - (1) Where a dispute has been referred under Section 64 and the Registrar or the nominee hearing the dispute is satisfied on enquiry or otherwise, that a party to such dispute, with intent to defeat or obstruct the execution of any Date of Order 26-02-2018 W.P.Nos.3336-3337/2018 Vijaylakshmi Shankar & Anr. Vs. M/s. Rakshodaya Chits Pvt. Ltd. & Anr. award or the carrying out of any order that may be made. -
(a) is about to dispose of the whole or any part of his property; or
(b) is about to remove the whole or any part of the property from the jurisdiction of the Registrar, he may, unless adequate security is furnished, direct conditional attachment of the said property, and such attachment shall have the same effect as if it is made by a competent Civil Court.
(2) Where the Registrar or the nominee directs the attachment of any property under sub- section (1), he shall issue a notice calling upon the person whose property is so attached to furnish such security as he thinks adequate within a specified period, and if the person fails to provide such security, the Registrar or the nominee may confirm the order, any may, after the decision in the dispute, direct the disposal of the Date of Order 26-02-2018 W.P.Nos.3336-3337/2018 Vijaylakshmi Shankar & Anr. Vs. M/s. Rakshodaya Chits Pvt. Ltd. & Anr. property so attached towards the claim, if awarded.
(3) Any attachment made under this section shall not affect the rights, subsisting prior to the attachment of the property, of persons who are not parties to the dispute, or bar any person holding a decree against the person whose property is so attached from applying the sale of the property under the attachment of such decree. (4) The Registrar or the nominee may, in order to prevent the ends of justice being defeated, make such interlocutory orders pending the award in a dispute referred to in sub-section (1) as may appear to be just and convenient.
69. Decision of Registrar or nominee. - When a dispute is referred to arbitration under this chapter, the Registrar or the nominee, may, after giving a reasonable opportunity to the parties to the dispute to be heard, make an award on the dispute Date of Order 26-02-2018 W.P.Nos.3336-3337/2018 Vijaylakshmi Shankar & Anr. Vs. M/s. Rakshodaya Chits Pvt. Ltd. & Anr. on the expenses incurred by the parties to the dispute in connection with the proceedings and the fees and expenses payable to the Registrar or the nominee, and such an award shall not be invalid merely on the ground that it was made after the expiry of the period, if any, fixed for deciding the dispute by the Registrar, and shall, subject to appeal under Section 70, be final and binding on the parties to the dispute."
7. Paragraphs 3 and 4 of the impugned order Annexure E dated 16/12/2017 which is similar in Annexure F order dated 16/12/2017 are also quoted below for ready reference.
"3) Further, the opponent No.2 was informed that if he desires to have this attachment raised, he shall furnish cash security to the extent of the suit claim amount by depositing the amount to the Disputant company and producing the original receipt issued by them to this Court Date of Order 26-02-2018 W.P.Nos.3336-3337/2018 Vijaylakshmi Shankar & Anr. Vs. M/s. Rakshodaya Chits Pvt. Ltd. & Anr.
on or before 16-12-2017 at 3:00 PM without fail for raising the attachment.
4) Further, the above said conditional notice sent to the Opponent No.2 was duly served on him. But, in spite of the receipt of the conditional Attachment notice, the Opponent No.2 did not furnish the cash security and he also failed to appear before this Court. Hence, the conditional attachment order issued by this Court is made absolute and the immovable Property of Opponent No.2 as shown in the schedule below, now stands attached to the Disputant Company for the entire full claim amount of this case."
8. A bare perusal of the said stipulations made in the impugned orders show that the present petitioners were given due notice by the Respondent No.2 - Nominee of the Deputy Registrar to appear before her on 16/12/2017 at 3:00 P.M., and furnish adequate cash security to avoid attachment of the scheduled property, however, despite the service, the petitioner No.2 Date of Order 26-02-2018 W.P.Nos.3336-3337/2018 Vijaylakshmi Shankar & Anr. Vs. M/s. Rakshodaya Chits Pvt. Ltd. & Anr. husband did not appear before the said Authority, nor did he furnish any cash security as demanded by the aforesaid Officer for the aforesaid amount due from petitioner No.1. The said impugned orders also stipulate in para 2 that the petitioner No.1 the wife, Smt. Vijaylakshmi Shankar had taken the prize money of the said Chit based on the surety of her husband, the present petitioner No.2, Mr.S. Umashankar.
9. Thus, the Respondent No.2 cannot be said to have either proceeded on a wholly erroneous premise or not complying with the principles of natural justice. Section 68 of the Act quoted above provides for attachment before judgment and its requirement of giving an opportunity to give adequate cash security to avoid attachment of property, stood complied with by the Respondent.
10. As per Section 69 of the Act quoted above, before deciding the dispute, the Deputy Register or his Nominee has to provide a reasonable opportunity of Date of Order 26-02-2018 W.P.Nos.3336-3337/2018 Vijaylakshmi Shankar & Anr. Vs. M/s. Rakshodaya Chits Pvt. Ltd. & Anr. hearing to the parties of the dispute to be heard in the matter. Therefore, while the attachment before the judgment, the said Authority cannot be questioned on the ground of breach of principles of natural justice, the decision itself under section 69 of the Act is still awaited and yet to be made.
11. A prima facie reading of the impugned order under Section 68(2) of the Act vide paragraphs 3 and 4 quoted above discloses that the petitioners were served with a notice to provide them with a reasonable opportunity of hearing by the Respondent No.2, but nothing is placed on record to show that the petitioners in fact did approach the said Authority and raise their objections in the matter or had furnished the alternative cash security.
12. Therefore, the said orders do not suffer from the vice of the principles of natural justice. More over, they being the orders under Section 68(2) of the Act amount to only the attachment before judgment which Date of Order 26-02-2018 W.P.Nos.3336-3337/2018 Vijaylakshmi Shankar & Anr. Vs. M/s. Rakshodaya Chits Pvt. Ltd. & Anr. is to over come the possibility of defeating the ends of justice required to be met after the Award under Section 69 of the Act is passed. An attachment before judgment is a normal mode for securing the amount due to the claimants in case a decree in this regard is passed. The decision or Award under Section 69 of the Act is yet to be made by the Respondent No.2.
13. Therefore, in the present case, the petitioners are still at liberty to approach the said Respondent and raise their objections on merits of the case under Section 69 of the Act.
14. Accordingly, the present writ petitions are disposed of with the aforesaid liberty to the petitioners. No order as to costs.
Sd/-
JUDGE BMV*
Citation
ReplyDeleteCDJ 2018 kar HC 367