Andhra Pradesh High Court – Amravati
Reddy Gowrayya S/O. Redy Suryanarayana vs State Of Andhra Pradesh on 27 December, 2024
HON'BLE SRI JUSTICE GANNAMANENI RAMAKRISHNA PRASAD
WRIT PETITION Nos.7691, 6519, 7583, 7614,
7683, 7686, 7759 of 2016
COMMON ORDER:
Heard Sri N. Subba Rao, learned Senior Counsel assisted by
Sri M. Devi Prasad, learned Counsel and Sri Mangena Sree Rama
Rao, learned Counsel for the Writ Petitioners and Ms. Sushma
Yaganti, learned Counsel appearing for Respondent No.3 and Sri Y.
Subba Rao, learned Assistant Government Pleader for Revenue.
2. The facts, issues and law involved in all these Writ Petitions
are one and the same, and therefore, all the Writ Petitions have
been heard and are being disposed of by this Common Order.
3. The Counter Affidavits filed by the Respondent Nos.2 & 3 are
identical. The Principal Secretary, Cooperative (Respondent No.1)
and the Joint Sub-Registrar (Respondent No.4) have not filed the
Counter Affidavits in any of the Writ Petitions.
4. Since the facts and issues are all common, the facts as set-
out in W.P.No.7691 of 2016 are referred herein as the basis. The
prayer made therein is as under:
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―It is therefore prayed that this Hon’ble Court may be pleased to
issue a writ more particularly one in the nature of Writ of
Mandamus
1) declaring the action of the Respondents 1 & 2 in taking steps in
cancellation of sale deed dt.11.01.2016 executed in my favour by
the 3rd Respondent as illegal, irregular, arbitrary, violative of
provisions of the Andhra Pradesh Registration Act and rules
framed there under and also violative of provisions of Andhra
Pradesh Co-operative Societies Act 1964 and also offends
Articles 14, 21 & 300 A of constitution of India;
2) to declare the action of the Respondents 1, 2 & 4 in violation of
principles of Natural Justice and;
3) to declare that the deed of cancellation dated 15.02.2016 vide
Doc.No.1350/2016 executed by the 2nd respondent and registered
by the 4th Respondent as illegal and consequently direct the
Respondents not to dispossess the petitioner from land registered
in his favor pursuant sale deed dt.11.01.2016 executed in his
favour situated in T.S.NO. 1777/1,2, 1778, 1779 to an extent of
500 Sq. yards at Eluru; and pass such other order or orders as the
Hon’ble Court may deem fit and necessary in the circumstances of
the case.‖Facts as projected by the Writ Petitioners:
5. The facts as mentioned in the Affidavit filed in support of the
Writ Petition (W.P.No.7691 of 2016) are as under:
5.1. The Eluru Weavers Co-operative Production and Sale Society
(Society) (Respondent No.3) (bearing Society Registration No. WG
122) was registered on 03.12.1936. It is submitted that the
Respondent No.3 Society has purchased the subject property on
05.03.1955 vide Registered Sale Deed bearing Document No.679 of
1955 (Ex.P.3) along with several other properties with its own funds.
It is stated in the Affidavit that vide Resolution No.52 dated
3
10.07.2015, the Society had resolved to sell or lease the properties
and consequently the Respondent No.3 Society has put-up certain
plots for sale to third parties. In terms of the purported Resolution
No.52, the President of the Respondent No.3 Society had sold
several plots to the third parties (the Writ Petitioners herein).
5.2. Writ Petitioner in W.P.No.7691 of 2016 has purchased one
plot by paying valid consideration of Rs.25,00,000/- to the
Respondent No.3 under registered Sale Deed dated 11.01.2016
vide Document bearing No.342 of 2016. It is stated that the
President of the Respondent No.3 Society had executed the Sale
Deed on the strength of the purported Resolution No.52, dated
10.07.2015. It is further submitted that on the date of registration
itself, possession was delivered to the Writ Petitioner.
5.3. It is further submitted that in less than 45 days i.e., on
15.02.2016, the Respondent No.3 Society represented by the
Assistant Director, Handloom & Textiles (Respondent No.2)
(Functional Registrar) had cancelled the Sale Deed dated
11.01.2016, vide Document bearing No.1350 of 2016 unilaterally
and arbitrarily, and without notice to the Writ Petitioner.
5.4. It is contended that the unilateral execution of Cancellation
Deed dated 15.02.2016, thereby canceling the earlier registered
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Sale Deed dated 11.01.2016, is illegal and the same came to be
challenged by the Writ Petitioner on various grounds.
Contentions of Sri N. Subba Rao, Learned Senior Counsel:
6. Learned Senior Counsel submits that Section 9 and Section
43 of the A.P Cooperative Societies Act, 1964 (for short ‗APCS Act’)
are applicable to only such Societies which receives State Aid,
whereas the Respondent No.3 is an unaided co-operative society,
and therefore, the Respondent No.2 cannot cancel the Sale Deed
unilaterally, without notice to the Vendees (Writ Petitioners herein)
by executing the Cancellation Deed.
6.1. Learned Senior Counsel has placed reliance on Para Nos.4 &
5 in Thota Ganga Laxmi and Another Vs. Government of Andhra
Pradesh [(2010) 15 SCC 207].
6.2. Reliance was also placed on M. Venkata Ramana and
another Vs. A.P Co-operative Tribunal, Hyderabad [2010 (4) ALT
34 (D.B)].
6.3. Reliance was also placed on Para Nos.46 & 47 in Satya Pal
Anand Vs. State of Madhya Pradesh and Others [(2016) 10 SCC
767].
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6.4. Learned Senior Counsel submits that the Writ Petitioners are
bonafide purchasers for valid consideration and that the Writ
Petitioners, as bonafide purchasers, are not concerned about
whether the proper procedure has been followed by the President of
the Society or not; that the prior permission was not required from
Respondent No.2, because the Respondent No.3 Society does not
receive the State aid; that even assuming that the permission was
required from the Respondent No.2, lack of such permission is a
curable defect, inasmuch as the permission can be given later, if the
purchasers or the Society is able to satisfy the Respondent Nos.1 &
2 namely the Principal Secretary, Co-operative and the Assistant
Director, Handloom & Textiles.
6.5. It is further contended that once the registered Sale Deed is
executed, the competent Civil Court can only cancel the same,
whereas the Respondent No.2, is neither the party to the registered
Sale Deed nor competent to register the Cancellation Deed dated
15.02.2016; that the Respondent No.2 acted in an arbitrary and
highhanded manner and also unilaterally; that the Registration Act
and Rules contemplates that both parties to the document of
registration can cancel the duly registered Sale Deed but not
otherwise; that the scope of power/jurisdiction vested with the
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Respondent No.2 is only for resolving the disputes between the
members of the Society or the Society with any other Society under
Section 63 of the APCS Act; that the Respondent No.2 can take
action only after conducting enquiry, whereas no enquiry was
conducted by the Respondent No.2 before registering the
Cancellation Deed on 15.02.2016; that the Respondent No.2 cannot
present a Deed to the Registrar for cancellation of Sale Deed; and,
that the method adopted by the Respondent No.2 on behalf of
Respondent No.3 in registering the Cancellation Deed violates the
Rule 26 (k) (i) of the Andhra Pradesh Registration Rules, 1960.
Interim Order:
7. The Writ Petition bearing W.P.No.6519 of 2016 (filed by Sri
Nadipudi Eswara Rao – Writ Petitioner) is the first Writ Petition filed
in this batch of cases. Learned Single Judge of this Court, vide
Order dated 01.03.2016 in W.P.M.P.No.8298 of 2016 in
W.P.No.6519 of 2016 was pleased to direct as under:
―So far as the first relief is concerned, prima facie, this Court is
not inclined to grant such relief at this stage. So far as the third
relief is concerned, the action of the 4th respondent in accepting
the cancellation document dated 11.02.2016 at the instance of
the 3rd respondent without any Intimation to the petitioner, is in
violation of Rule 26K(1) of the Rules made under the
Registration act, 1908.
In that view of the matter, status quo obtaining as on today shall
be maintained in all respects by both the parties. However, it is
made clear that the petitioner shall not create any third party
interest by way of sale or creation of charge in any manner over
7the property situated in T.S.No. 1777/1,2, 1778, 1779 to an
extent of 500 Sq. yards at Eluru. Petitioner shall also not make
any changes to the property in question in any manner by way of
construction or otherwise.”
7.1. Similar Interim Orders were passed in the subsequent Writ
Petitions involved in the batch on 10.03.2016.
7.2. The following are the details of the Writ Petitioners and the
extents of land purchased:
Sl. W.P.Nos. Writ Town Extent Doc. No. & Valuable Resolution
No Petitioner/ Sy.Nos. Date of Conside- No.52, Dt.
Sri (Eluru Registrati ration
Town) on
01 7691/2016 Reddy 1777/1, 500 342/2016, 25 10.07.2015
Appainaidu 2, 1778, sq.yards 11.1.2016 Lakhs
1779
02 6519/2016 Nadipudi
Eswara -Do- -Do- -Do- -Do- -Do-
Rao
03 7583/2016 Maggi
Srinivasa -Do- -Do- 346/2016, -Do- -Do-
Rao 11.1.2016
04 7614/2016 Arangi
Murali -Do- 300 459/2016, 15 -Do-
Krishna sq.yards 18.1.2016 Lakhs
05 7683/2016 Reddy
Gowrayya -Do- 500 347/2016, 25 -Do-
sq.yards 11.1.2016 Lakhs
06 7686/2016 Lanka
Tirupathi -Do- -Do- 343/2016, -Do- -Do-
11.1.2016
07 7759/2016 Reddy
Venkata -Do- -Do- 345/2016, -Do- -Do-
Ramana 11.1.2016
Averments in the Counter Affidavit filed by the Respondent
Nos.2 & 3:
8. That the Counter Affidavits filed by the Respondent Nos.2 and
3 are pari-materia one and the same. Counter Affidavit of
8Respondent No.2 has about 32 material documents. Respondent
No.3 has also filed W.P.M.P.No.9797 of 2016 (vacate stay petition)
in W.P.No.7691 of 2016 along with the Counter Affidavit. Similar
Applications for vacating stay were also filed in the other Writ
Petitions in the batch.
8.1. Respondent No.2 namely the Assistant Director, Handloom
and Textiles has filed a Common Counter Affidavit along with other
material documents, which are very significant and would go to the
root of the matter. This Court deems it appropriate to deal with the
averments in the Counter Affidavit dated 07.04.2016 and several
material documents along with the Counter Affidavit in extenso.
8.2. Respondent No.2 would stoutly contend in the Counter
Affidavit that the Respondent No.3 is indeed an aided Society and
not an unaided Society as contended by the Writ Petitioners. In Para
Nos.8 & 9 of the Counter Affidavit, various details were given, which
indicate that the Government is a member of the Society, with its
Share Capital contributed to the Society of a sum of Rs.2,91,265/-
way back in the year 1937 itself. Thereafter several amounts/grants
were given by the Government of Andhra Pradesh from time to time
in the form of Housing Loan, Cyclone Loan, Housing Subsidy,
Marketing Development Assistance (Grant) from Government, Under
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Project Package Scheme, Handloom Development Centre by the
Government of India, Quality Dye Unit by Government of India and
also for miscellaneous purpose by the Government of India. The
Government of Andhra Pradesh had also contributed a sum of
Rs.10,28,324/- under Loan Waiver Scheme; sum of Rs.6,53,191/-
was spent for waiving the loan of the individual weavers loan and a
sum of Rs.1,00,558/- was spent under RRR Scheme at various
points of time. It is also stated that, since the year 1989-90, the
District Co-operative Central Bank Limited, Eluru, has sanctioned
cash credit accommodation, regarding which several details were
also provided in the Counter-Affidavit.
8.3. The Respondent No.3 Society comes under the purview of
Section 9-A of the APCS Act because it has received the State aid,
and therefore, it goes without saying that assets possessed by the
Society (Respondent No.3) will come under the control of Functional
Registrar of the Weavers Cooperative Society i.e., the Assistant
Director, Handloom and Textiles, Eluru, as the same (State Aid) has
been credited to the account of Respondent No.3 Society from out of
the funds provided by the Government.
8.4. It is stated in Para No.10 of the Counter Affidavit that the
Managing Committee consists of (9) nine Directors. The Managing
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Committee is an elected body of the Society and that they were
elected under Rule 22 of the APCS Act and Rules, 1964 on
16.10.2015 and that all the Directors together have elected one of
the Directors, amongst them i.e., one Sri Matsa Santa Rao, S/o
Somayya as the President of the Society (wrongly mentioned in the
Cause Title as Mutyala Santa Rao, President of the Society); that all
the policy decisions have to be taken by the Managing Committee
during the meeting in the shape of Resolutions and that such
Resolutions should be approved by the General Body of the Society
as per Section 30 of the APCS Act, and thereafter, the said
proposals in the form of Resolutions shall be submitted to the
Functional Registrar i.e., Assistant Director, Handloom and Textiles
(Respondent No.2 herein) for his approval as per Section 9-A of the
APCS Act. Section 9-A of the APCS Act provides that:
“Where the Government extends State aid
as specified under Section 43 of the Act, such
Society shall not dispose of or create any charge
over its property without prior approval of the
Registrar and the consent of the federal Society
or Financing Bank concerned as the case may
be”.
8.5. Whereas, in the present case, the Managing Committee was
elected on 16.10.2015 and it has neither passed any Resolution,
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whatsoever, to dispose of the land owned by the Society nor was
any such Resolution approved by the General Body of the Society.
It is also stated that even if such Resolution had been passed by the
Managing Committee, the same would be of no avail unless the
General Body approves/ratifies the same and thereafter the
Functional Registrar (Respondent No.2) ratifies such Resolution. It
is further submitted that in the instant case, none of these steps
have factually taken place.
8.6. It is stated in Para No.11 of the Counter Affidavit that the
President alone has no power to put the property of the Society for
sale. It is reflected from the material documents that all the members
of the Managing Committee, except its President namely Sri Matsa
Santa Rao, have later clarified that they have not put the property for
sale by submitting statements to the Functional Registrar to this
effect; and that it has been categorically stated by all the Managing
Committee members, except the President, that they have never
given their consent to sell the property and the Managing Committee
has not passed any Resolution to this effect ever since the
Managing Committee of the Society had got elected on 16.10.2015.
It is also stated that the subject property is presently vested with the
Respondent No.2 and it has not been delivered to any one so far. It
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is also stated in Para No.12 of the Counter Affidavit that it is
mandatory to obtain permission from the Respondent No.2 before
making any sale of the property owned by the Society. In Para
No.13, it is once again reiterated that when the Government of A.P is
having Share Capital in such Society (Respondent No.3), all sale
transactions of the property of the Society are prohibited as
stipulated in Section 9-A of the APCS Act.
8.7. It is also stated that, if the advance notice was issued before
registering the Cancellation Deed, there was every danger that the
President of the Society would fraudulently dispose of the entire land
to the third parties, thereby permanently affecting the interest of the
Society.
8.8. In Para No.13 of the Counter Affidavit, the Respondent No.2
has raised a pertinent issue that the defect of not obtaining prior
permission from the Functional Registrar (Respondent No. 2) is not
a curable defect because the Sale Deeds which are unauthorisedly
and unilaterally executed by its President in favour of the Writ
Petitioners is ab initio void, as there is neither any Resolution by the
Managing Committee and approved/ratified by the General Body nor
payment of any consideration in favour of Respondent No.3 Society
involved in the transaction. A specific contention has been made in
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the Counter Affidavit that, an alleged sale consideration of various
amounts involved in the sale of plots by the President of the Society
to the Writ Petitioners has not been accounted for in the account
books of the Society. It is also stated in Para No.13 that the total
amount involved is about Rs.2,64,00,000/- (Two crores and sixty
four lakhs). Whereas, not a single paisa has been remitted into the
bank-account of the Society held with District Cooperative Central
Bank Limited, Eluru. For ready reference, Para No.13 of the
Counter Affidavit is usefully extracted hereunder:
―13. It is further submitted that this is not a curable defect because
in these sale deeds between petitioners and 3rd respondent as
there is no consideration involved in the transactions. The
President of the Society who executed the sale deed is not
competent to enter into any agreement in absence of the Present
Managing Committee resolution and approval of the General Body
of the Society for the same and prior permission from the
Functional Registrar. It is bring to the notice of the Hon’ble High
Court that the entire transaction is involved in huge amount of
Rs.2,64,00,000/- (Rupees Two Crores and Sixty Four Lakhs only)
and no single paisa is remitted into bank account of the society
held with Dist. Coop. Central Bank Ltd. Eluru. It is further
submitted that the age of the then President of the society víz. Sri
Matsa Santha Rao is 101 years. In the mean time, on 14.03.2016
Sri Matsa Santha Rao the ex-president of the said society has
given written statement before the Collector & Dist. Magistrate,
West Godavari, Eluru stating that the petitioner has not paid single
rupee, but the petitioner promised him that 4 acres and 10 cents
of land will be given and executed in favour of the Eluru Weavers
Cooperative Society Ltd., Eluru. A registered letter has received in
this office on 14.03.2016 from Sri Matsa Santha Rao stating that
no single paisa has paid to him by the petitioners in all the above
7 writ petitions.‖
148.9. It is also stated that the Writ Petitioners have not entered into
prior agreement with the Respondent No.3 Society, and therefore,
the transaction of registration of Sale Deeds itself is a sham one and
consequently void, illegal and unlawful. It is also once again
reiterated that the Writ Petitioners as well as the Respondent No.3
Society have not obtained any ‗NOC’ from Respondent Nos.1 and 2,
and on this count also, the registration of the above Sale Deeds is
ab initio void. It is also stated that the Respondent No.2 was not a
party to the Sale Deeds and that the President of the Society alone
does not have the power to execute a Sale Deed without there being
a prior Resolution of the Managing Committee and
approval/ratification by the General Body as per procedure and
without obtaining prior permission/approval from the Respondent
Nos.1 and 2.
8.10. The cardinal contention which has been put forth in Para
No.18 of the Counter Affidavit is that the Respondent No.2 has
already passed Orders on 23.02.2016 superseding the entire
Managing Committee including President of the Eluru Weavers
Cooperative Society Limited by filing criminal cases against the
erring President Sri Matsa Santa Rao under Sections 408 and 420
of IPC in I Town P.S, Eluru bearing F.I.R.No.25 of 2016 dated
1512.02.2016. Para No.18 of the Counter Affidavit is usefully extracted
hereunder:
―18. It is submitted that the 2nd respondent has already passed
orders on 23.02.2016 superseding the entire Managing
Committee including its president of the Eluru Weavers
Cooperative Society Ltd., W.G.No 122, Eluru and also filed a
criminal case against the erring president Sri Matsa Santha Rao
under Sec.408, 420 of IPC in I Town Police Station, Eluru. The
copy of the FIR is enclosed for kind perusal of Hon’ble court.
The 2nd respondent has also ordered an Inquiry under Section
51 of Andhra Pradesh Cooperative Societies Act, 1964 into the
affairs of the society with special reference to disposal of the site
in R.S.No.1/1777, 2/1777 and 1778 in Eastern Street, Eluru of
the Eluru Weavers Cooperative Society Ltd No.122, Eluru and
misappropriation of the sale amount by the President of the
Society.‖8.11. In Para No.19 of the Counter Affidavit, it is stated that the
person (the President – Sri Matsa Santa Rao) who had executed a
Sale Deed had in fact made a statement before the Collector &
District Magistrate that he had never received single paisa as
consideration of the above sale and the Writ Petitioner has cheated
him.
Description of the documents filed along with Counter Affidavit
9. The Government has filed about 32 material documents along
with the Counter Affidavit. The Notice dated 29.10.2015 (at Page
No.96 of the Counter Affidavit) sent by the Respondent No.2
(Assistant Director, Handloom and Textiles) to the President of the
Society (Sri Matsa Santa Rao) states that the said President has
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effected some illegal sales approximately for an extent of 2000
square yards. The President was directed to attend the Office of
Respondent No.2 along with the Original Documents relating to the
Respondent No.3 Society. The President of the Society was directed
to submit all the documents. In the said Notice dated 29.10.2015,
there is a reference to a Report submitted by the Development
Officer (Handloom and Textiles) dated 13.10.2015.
9.1. Page No.98 of the Counter Affidavit is the Reply given by the
President on 04.11.2015 seeking five days time to submit the
original documents. It is also stated by the President that some
people have encroached into the land. Another Notice was sent by
the Respondent No.2 to the Respondent No.3 Society dated
16.11.2015 (at Page No.100), which is in the form of a Reminder
seeking the President of the Society to submit the Original
Documents relating to the immovable properties. For this Reminder
from Respondent No.2, the President of the Society had addressed
a letter dated 08.12.2015 (at Page No.102 of the Counter Affidavit)
categorically stating that he has received the letter from the District
Collector to the effect that the members of the Society were
requesting for construction of community hall and to send proposals
for the same.
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9.2. The President of the Society has again addressed another
letter on 02.01.2016 (at Page No.105 of the Counter Affidavit) to the
Respondent No.2. In this letter, the President of the Society had
sought permission from Respondent No.2 for selling-away the
land of the Society for raising funds and had ‗categorically’ stated
that without permission from Respondent No.2, selling of any
property of the Society does not arise (at Page No.107 of the
Counter-Affidavit).
9.3. Respondent No.2 has issued ‗Show Cause Notice’ to the
President of the Society on 30.01.2016 (Page No.110 of the Counter
Affidavit), by which time, it has come to the knowledge of the
Respondent No.2 that the President of the Society has illegally sold
away the immovable property of the Respondent No.3 Society to
third parties (Writ Petitioners herein). Therefore, Respondent No.2
had directed the President of the Society to explain the reasons as
to why appropriate legal action should not be taken against him for
unauthorized sale of immovable property belonging to the
Respondent No.3 Society.
9.4. The members of the Managing Committee, except the
President-Sri Matsa Santa Rao, have unanimously addressed a
letter to the Respondent No.2 on 20.02.2016 (at Page No.113 of the
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Counter Affidavit), requesting the Respondent No.2 to take over the
management of the Respondent No.3 Society by suspending the
existing Managing Committee in view of various irregularities
committed by Sri Matsa Santa Rao who was officiating in the
capacity of President of the Society. Thereafter, on the direction of
the District Collector, the District Cooperative Officer, West
Godavari, Eluru, has submitted a Report dated 17.02.2016 after
conducting enquiry. Certain irregularities on the part of the President
of the Society were mentioned in the said Report dated 17.02.2016.
The same is usefully extracted hereunder:
―In view of the above, the following irregularities are observed.
That Sri Matcha Santha Rao, President of Eluru Weavers
Cooperative Society Ltd., Eluru has intentionally sold out the
property to an extent of 3825.645Sq.Y. without obtaining the
permission of the concerned Commissioner as required under
section 9-A of the APCS Act1964,
2) That the sale proceeds are not accounted for to the books of
accounts of the society.
3) That though the Assistant Director, Handlooms, Eluru informed
about the issue to the District Registrar, Eluru, without taking any
caution they have simply registered the sale documents executed
by Sri Matcha Santha Rao.
4) That Sri Matcha Santha Rao, President of Eluru Weavers
Cooperative Society Ltd., Eluru has himself admitted that by
utilizing the sale proceeds he made an agreement to purchase
Ac.4.50 cents of land in Seetapuram.
It is submitted that the Assistant Director, Handlooms,
Eluru has taken every step to prevent the transaction before
occurring the tranaction, Sri Matcha Santha Rao, President of
Eluru Weavers Cooperative Society Ltd., Eluru with a malafide
intention mislead the Department and acted as per his whims and
19
fancies. After wards, he ordered an Inquiry under section 51 of the
APCS Act, 1964 and also filed a criminal complaint against Sri
Matcha Santha Rao, President of Eluru Weavers Cooperative
Society Ltd., Eluru in Two town police station, Eluru
In view of the above,
A) The Assistant Director, Handlooms, Eluru may be instructed to
direct the Inquiry Officer to submit the Inquiry Report at an early
date so as to initiate actions against the concerned as per law.
B The District Registrar, Eluru may be instructed to take
necessary steps to cancel the registrations of sale deeds
executed by Sri Matcha Santha Rao, President of Eluru Weavers
Cooperative Society Ltd., Eluru.‖
Reply/Rejoinder filed by the Writ Petitioners
10. The Writ Petitioners have filed Reply Affidavit (Rejoinder
Affidavit) on 14.02.2020 denying all the averments in the Counter
Affidavits. Relevant portion is usefully extracted hereunder:
―7. I further humbly submit that …………………………………….
………………………………………………………………………….
………………………………………………………………………….
………………………………………………………………………….
The respondents are dis-entitled to cancel the deed executed by
the then society President on receipt of the valid consideration.
The genuineness or otherwise of sale deed, the identity and
nature of the land in dispute, whether the alienations are liable to
be set aside and the sale deeds are liable to cancellation,
whether constructions made by any of the parties etc., are all
matters which are outside the scope of the Sec.61 of
Cooperative Societies Act, as they do not lead to the business of
the society. When once the sale deeds are executed and
registered, title in the property covered by sale deed gets legally
transferred in favour of the vendees and even the vendors
cannot unilaterally cancel the same. Even the transactions is
found to be illegal beyond the authority of the society necessary
steps has to be taken to the provisions of the Specific Relief Act,
which provides cancellation of the document and decrees
following provisions of law of limitation. Without considering
settled principles of law the 3rd respondent unilaterally cancelled
the sale deed executed by the then President of the society after
20receipt of valid consideration. It is not my business to look
after whether sale consideration was deposited in the
society bank account or not they have to take appropriate
action against the then president with regard to non deposit
of the sale consideration. Under the guise of non deposit of
sale consideration, cancellation of my sale deed is illegal,
irregular, arbitrary under settle principles of law.
8. I further humbly submit that with regard to the rules referred
under Income Tax Act In the counter affidavit filed by
respondents 2 and 3, has nothing to do with the case as the
entire sale consideration is fair, the question of obtaining
permission from the authority under act the restriction is
applicable only in respect of notified areas which was notified
U/s.269 of the Act, property purchased by me is not situated in
such notified area. As such the question of applicability of
Income Tax Act does not arise in this case.
9. I further humbly submit that I have paid total sale
consideration of Rs.25,00,000/- with my hard earned money and
I am in possession and enjoyment of the property since from the
date of purchase. The society has to approach competent civil
court in the event of any grievances with regard to sale deed.
Without considering the same execution of the cancellation deed
is illegal, irregular, arbitrary.‖
Issues:
11. From the above averments, the following issues fall for
consideration :
i) Whether the Respondent No.3 – The Eluru Weavers
Co-operative Production & Sale Society has received
the State Aid?, If yes, whether the Resolutions passed
by the Managing Committee are required to be
approved/ratified firstly by the General Body, and
thereafter, be approved by the Functional Registrar
(Respondent No.2 herein)?
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ii) Whether the Managing Committee has passed a
resolution bearing Resolution No.52 on 10.07.2015
authorising the President of the Society to sell the
immovable property owned by the Respondent No.3
Society? If yes, whether such Resolution was
approved/ratified by the General Body?
iii) Whether the valid sale consideration, while effecting the
purported sale transactions (in the form of Registered
Sale Deeds dated 11.01.2016 and 18.01.2016), had
been deposited into the Respondent No.3 Society’s
bank account or not?
iv) Whether Sri Matsa Santa Rao, the then President of the
Society has individually committed fraud?
v) Whether the rightful owner i.e., the Society, acting
through the Management Committee, has authorized
any one, particularly Sri Matsa Santa Rao, to sell the
subject plots and to execute Registered Sale Deeds in
favour of the Writ Petitioners?
vi) Whether the Sale Deeds executed by Sri Matsa Santa
Rao in favour of the Writ Petitioners vide Sale Deeds
dated 11.01.2016 and 18.01.2016 are legally valid? If
not, whether the Sale Deeds executed by Sri Matsa
Santa Rao are voidable or void ab initio?
22
vii) Whether there is any requirement in law to execute
Cancellation Deeds to annul the purported Sale Deeds,
if they are ‗sham ones’ by their very ‗character’?
viii) To what relief?
Analysis:
12. Facts and contentions of the rival parties have been
elaborately noted by this Court in the paragraphs hereinabove.
The following are the contentions of the Writ Petitioners:
i. That Sri Matsa Santa Rao, who was the President of the
Respondent No.3 Society, was authorized by a
purported Resolution No.52, dated 10.07.2015 to sell
the properties of the Society and in pursuance of the
said Resolution, the President of the Society had
executed various Sale Deeds on 11.01.2016 and
18.01.2016 (Ex.P.2);
ii. That the Writ Petitioners are the bonafide purchasers for
a valuable sale consideration;
iii. That once the Registered Sale Deeds are executed,
only a Competent Civil Court can cancel the same and
the Assistant Director, Handloom and Textiles
(Respondent No.2) who is neither the party to the
registered Sale Deeds nor having any statutory
competence could have cancelled the Sale Deeds by
23
way of registered Cancellation Deeds dated 15.02.2016
(Ex.P.1);
iv. That the Registration Act and its Rules contemplate that
both the parties to the registered Sale Deeds can alone
cancel the duly registered document jointly but not
otherwise;
v. That the Petitioners have placed reliance on various
Judgments to contend that the unilateral cancellation of
a Sale Deed is impermissible;
vi. That Section 9 and Section 43 of the Andhra Pradesh
Cooperative Societies Act, 1964 (the Act) are applicable
only to Societies that receive State Aid and that the
Respondent No.3 Society does not fall under the
category of Aided-Society inasmuch as the said Society
does not receive State aid;
vii. That the jurisdiction of Respondent No.2 is only to
resolve the disputes between the Members of the
Society, or between the Members of the Society and the
Management of the Society and or the disputes arising
between the Respondent No.3 Society with any other
Society as contemplated under Section 63 of the Act;
viii. That the Respondent No.2 can take action only after
conducting enquiry; and, that the impugned actions of
the said Respondent No.2 in registering the
Cancellation Deeds dated 15.02.2016 (Ex.P.1) for
cancelling the Registered Sale Deeds dated 11.01.2016
24
and 18.01.2016 (Ex.P.2) are per se illegal and arbitrary;
and,
ix. That the Respondent No.2 cannot present Cancellation
Deeds to the Joint Sub-Registrar (Respondent No.4) for
cancellation of the duly registered Sale Deeds dated
11.01.2016 and 18.01.2016 (Ex.P.2).
13. The Respondent Nos.2 & 3 have filed separate Counter
Affidavits which are in verbatim the same. As on the date of the
registration of the Cancellation Deeds (Ex.P.1), the Respondent
No.2 was the ‗In-charge Person’ of the Management inasmuch as
the Managing Committee stood suspended vide Proceeding dated
23.02.2016. At the outset, it has to be noted that all the contentions
of the Writ Petitioners have been stoutly rebutted by the Respondent
Nos.2 & 3 along with facts and figures supported by as many as 32
material documents. The following are the issues, which were
raised by the Writ Petitioners, but stoutly rebutted by the
Respondents:
(i) The claim made by the Writ Petitioners that on the strength
of the Resolution No.52 of the Managing Committee, dated
10.07.2015, the President of the Society, had executed the
registered Sale Deed in favour of the Writ Petitioners was
rebutted by the Respondents stating that no such
Resolution was passed. The Respondents would place
25reliance on the unanimous Letter dated 20.02.2016 (Page
113 of the Counter-Affidavit) written by all the Members of
the Managing Committee of the Society, to suspend the
Managing Committee and take the control of the
management (vide Letter dated 20.02.2016) and to initiate
legal action against Sri Matsa Santa Rao and to cancel his
membership.
(ii) The claim made by the Writ Petitioners that the provisions
of Section 9 and Section 43 of the Act are inapplicable
because the Respondent No.3 Society does not receive
the State Aid had been rebutted by the Respondents
(paras 8 & 9 of the Counter Affidavit along with material
papers). It is stated by the Official Respondents that right
from the inception of the Society, the Government is a
Member of the Society and it has contributed funds through
share capital of amount of Rs.2,91,265/- in the year 1975.
In the said paragraph of the Counter Affidavit, the
successive contributions from 1937 to the Financial Year
2015-16 have been mentioned which indicates that there is
consistent flow of Government aid to Respondent No.3
Society. This goes to show that State-Aid is given to the
Cooperative Society and therefore, prior permission of the
Functional Registrar (in this case, the Assistant Director of
Handloom and Textiles – Respondent No.2) is an
indispensible statutory mandate;
(iii) For the contention of the Writ Petitioners that they have
purchased the land of the Society under valid
consideration, it has been stoutly rebutted by the
26
Respondents in para 13 of their Counter Affidavit to the
effect that not a single paisa had been credited to the
account of the Society and that the remittance has not
been recorded in the account books of Respondent No.3
Society. Though the Petitioners have filed Reply/Rejoinder,
no proof has been filed evidencing the payment of valid
sale consideration to rebut the contentions of the Official
Respondents in this regard;
(iv) Regarding the contention of the Petitioners that they are
the bonafide purchasers for a valuable consideration, the
Respondents have rebutted the same by stating that the
President was never authorized by the Managing
Committee to sell away the properties of the Respondent
No.3 Society and also that the Petitioners could neither
establish the passing of the alleged Resolution No.52 nor
had shown even an iota of evidence that a valuable
consideration has been passed on from them to the
Respondent No.3 Society and therefore, the alleged sale
made by Sri Matsa Santa Rao in favour of the Writ
Petitioners is non-est in the eye of law and therefore, no
Notice is required to be issued either by the Respondent
No.4 (Joint Sub-Registrar) or by the Functional Registrar
(Respondent No.2). No effective reply was given by the
Petitioners in their Reply/Rejoinder to the opposition of the
Official Respondents in this regard.
14. This apart, the material documents placed on record by either
of the parties would indicate that the Managing Committee of the
27
Respondent No.3 has not passed any Resolution, more particularly
the alleged Resolution No.52, on 10.07.2015. The Respondent No.2
namely the Functional Registrar has lodged a Criminal Complaint
against Sri Matsa Santa Rao on 30.01.2016 (at page 196 of the
Counter Affidavit) complaining various irregularities committed by Sri
Matsa Santa Rao. In pursuance of the said Complaint, an FIR was
registered on 12.02.2016 bearing FIR No.25/2016 (at page 194 of
the Counter Affidavit).
15. The material documents filed along with the Counter Affidavit
would also indicate that the Members of the Managing Committee,
as well as the Respondent No.2 have suspected that the President
of the Society has been making certain illegal deals so as to affect
the interest of the Society. The correspondence would indicate that
the Development Officer (Handloom and Textiles) had submitted a
Report on 13.10.2015 as regards the misdeeds of Sri Matsa Shanta
Rao as President of Respondent No.3 Society.
16. On the strength of that Report dated 13.10.2015, the
Respondent No.2 has issued Notice to the President of the Society
indicating that attempts being made by him to illegally alienate about
2,000 square yards of the property belonging to Respondent No.3
28
Society and some of them are encroaching into the land owned by
the Society.
17. The Respondent No.2 had directed the President to submit an
appropriate explanation and to attend the enquiry scheduled on
04.11.2015 at 10.30 A.M along with all the original documents
relating to the properties owned by the Respondent No.3 Society (at
page 96 of the Counter Affidavit). The President of the Society
responded to the direction of Respondent No.2 through his
correspondence dated 04.11.2015 stating that he would submit all
the original title deeds within five days (at page 98 of the Counter
Affidavit).
18. On 16.11.2015, the Respondent No.2 has once again
addressed a Letter to the President reminding him about the
commitment undertaken by him through his Letter dated 04.11.2015
that within five days, he would submit the original documents (at
page 100 of the Counter Affidavit).
19. The Respondent No.2 has also addressed another Letter on
08.12.2015 to the President of the Respondent No.3 Society
indicating that some private parties are trying to occupy 2,000
square yards belonging to the Society and that there is a proposal
29
for constructing community hall for the benefit of the Members of the
Society in the extent of 2,000 square yards of the Society’s land.
The President was directed to submit the details of the properties of
the Society, Minutes Book and the original Title Deeds pertaining to
an extent of 2,000 square yards. The President was also directed to
send the proposals for construction of community hall for the benefit
of the Members of the Society (at page 102 of the Counter Affidavit).
20. The President of the Society had addressed a handwritten
Letter on 02.01.2016 proposing to sell away 2,000 square yards for
the benefit of the Members of the Society. It is stated that the said
site was not getting any income for the Society and that by selling of
2,000 square yards, the Society can buy about 4 acres of land in any
other location and he sought permission from Respondent No.2. It is
categorically stated in this Letter that without seeking permission
from Respondent No.2, no sale shall be effected by him (at page
105 of the Counter Affidavit). This Letter of the President of
Respondent No.3 Society assumes significance because the
President of the Society himself had admitted that without consent of
Respondent No.2, neither him nor the Society can sell away the
property. While so saying in his Letter dated 02.01.2016, the
President, in fact, executed Sale Deeds in favour of the Writ
30
Petitioners herein on 11.01.2016 and 18.01.2016. In the said Letter
of the President dated 02.01.2016, the President had categorically
requested the Respondent No.2 not to cause anxiety to him by
listening to the rumors that the President is illegally selling away the
properties of the Society.
21. Since by this time, the Respondent No.2 had categorically
come to know that the President of the Society illegally alienated the
land by the Respondent No.3 Society by way of registered Sale
Deeds on 11.01.2016 and 18.01.2016, Respondent No.2 issued a
Show Cause Notice to the President as to why action should not be
initiated against him in accordance with law (at page 110 of the
Counter Affidavit).
22. The entire correspondence starting from 29.10.2015 right up
to 30.01.2016 would indicate that the Official Respondents were
already conscious of the fact that the President of the Society is
determined on committing fraud and mischief. Even thereafter, vide
Letter dated 20.02.2016, the Members of the Managing Committee,
other than the President, have unanimously and jointly addressed a
Letter to Respondent No.2 to suspend the Managing Committee and
take control of the management of the Society (at page 113 of the
31
Counter Affidavit) and initiate suitable action against Sri Matsa Santa
Rao after cancelling his membership.
23. From the above admitted facts, it appears to the Court that
there was no Resolution, much less Resolution No.52, passed by
the Managing Committee. Therefore, in the absence of any such
Resolution, it cannot be said that the entire Management Committee
has effected sales by registering various Sale Deeds. The
correspondence between Sri Matsa Santa Rao, the President of the
Society and the Assistant Director, Handloom and Textiles
(Functional Registrar) (Respondent No.2) would clearly indicate that
the President of the Society has also admitted to the fact that there
is a statutory obligation on the Society to seek consent from
Respondent Nos.1 & 2 for selling-away the immovable properties of
the Society. It is also an admitted fact that neither the Respondent
No.1 nor Respondent No.2 had given any consent or authorization
or ‗no objection’ for effecting sales of immovable properties of the
Society to third-parties.
24. It is also an admitted fact that the Society has not received
even a single paisa in the form of sale consideration. The Writ
Petitioners have not been able to prove even by producing an iota of
evidence or by producing a scrap of paper to indicate that the sale
32
consideration had been passed on to the Respondent No.3 Society.
The subsequent events would also indicate that an FIR has been
registered against the President of the Society for his individual acts
of fraud. The Preliminary Report submitted by the Development
Officer (HNT) dated 13.10.2015 and the Final Report submitted by
the District Cooperative Officer to the District Collector dated
17.02.2016 would clinchingly prove that Sri Matsa Santa Rao has
individually committed fraud on the Society as well as the Official
Respondents. It is clinchingly establish that the President of the
Society alone has committed the illegal acts and had unilaterally and
without authorization and contrary to the statute had registered Sale
Deeds. Therefore, this Court holds that the Sale Deeds executed by
Sri Matsa Santa Rao, purportedly Officiating as President of the
Society, without there being any Resolution by the Managing
Committee or its approval either by the General Body or the
Government, are held to be ab initio void inasmuch as an individual,
without any authority of law, executed the Sale Deeds. Even the so
called sale transactions through the Sale Deeds dated 11.01.2016
and 18.01.2016 are not backed by any valid sale consideration. It is
a settled law that fraud vitiates everything.
33
Law on Fraud:
25. In State of Andhra Pradesh and Anr. Vs. T. Suryachandra
Rao : 2005 6 SCC 149, the Hon’ble Apex Court has discussed the
subject of fraud and its legal effect. The relevant portion is usefully
extracted hereunder:
―8. By ―fraud‖ is meant an intention to deceive; whether it
is from any expectation of advantage to the party himself
or from ill-will towards the other is immaterial. The
expression ―fraud‖ involves two elements, deceit and
injury to the person deceived. Injury is something other
than economic loss, that is, deprivation of property,
whether movable or immovable, or of money, and it will
include any harm whatever caused to any person in
body, mind, reputation or such others. In short, it is a
non-economic or non-pecuniary loss. A benefit or
advantage to the deceiver, will almost always cause loss
or detriment to the deceived. Even in those rare cases
where there is a benefit or advantage to the deceiver, but
no corresponding loss to the deceived, the second
condition is satisfied. [See Vimla (Dr.) v. Delhi
Admn. [1963 Supp (2) SCR 585 : AIR 1963 SC 1572 at
pp. 1576-77 para 14 : (1963) 2 Cri LJ 434] and Indian
Bank v. Satyam Fibres (India) (P) Ltd. [(1996) 5 SCC
550] ].
9. A ―fraud‖ is an act of deliberate deception with the
design of securing something by taking unfair advantage
of another. It is a deception in order to gain by another’s
loss. It is a cheating intended to get an advantage.
(See S.P. Chengalvaraya Naidu v. Jagannath [(1994) 1
SCC 1] .)
10. ―Fraud‖ as is well known vitiates every solemn act.
Fraud and justice never dwell together. Fraud is a
conduct either by letter or words, which includes the
other person or authority to take a definite determinative
stand as a response to the conduct of the former either
by words or letter. It is also well settled that
misrepresentation itself amounts to fraud. Indeed,
innocent misrepresentation may also give reason to
claim relief against fraud. A fraudulent misrepresentation
34
is called deceit and consists in leading a man into
damage by wilfully or recklessly causing him to believe
and act on falsehood. It is a fraud in law if a party makes
representations, which he knows to be false, and injury
enures therefrom although the motive from which the
representations proceeded may not have been bad. An
act of fraud on court is always viewed seriously. A
collusion or conspiracy with a view to deprive the rights
of others in relation to a property would render the
transaction void ab initio. Fraud and deception are
synonymous. Although in a given case a deception may
not amount to fraud, fraud is anathema to all equitable
principles and any affair tainted with fraud cannot be
perpetuated or saved by the application of any equitable
doctrine including res judicata. (See Ram Chandra
Singh v. Savitri Devi [(2003) 8 SCC 319] .)
11. ―Fraud‖ and collusion vitiate even the most solemn
proceedings in any civilised system of jurisprudence. It is
a concept descriptive of human conduct. Michael Levi
likens a fraudster to Milton’s sorcerer, Comus, who
exulted in his ability to, ‗wing me into the easy-hearted
man and trap him into snares’. It has been defined as an
act of trickery or deceit. In Webster’s Third New
International Dictionary ―fraud‖ in equity has been
defined as an act or omission to act or concealment by
which one person obtains an advantage against
conscience over another or which equity or public policy
forbids as being prejudicial to another. In Black’s Law
Dictionary, ―fraud‖ is defined as an intentional perversion
of truth for the purpose of inducing another in reliance
upon it to part with some valuable thing belonging to him
or surrender a legal right. A false representation of a
matter of fact, whether by words or by conduct, by false
or misleading allegations, or by concealment of that
which should have been disclosed, which deceives and
is intended to deceive another so that he shall act upon it
to his legal injury. In Concise Oxford Dictionary, it has
been defined as criminal deception, use of false
representation to gain unjust advantage; dishonest
artifice or trick. According to Halsbury’s Laws of England,
a representation is deemed to have been false, and
therefore a misrepresentation, if it was at the material
date false in substance and in fact. Section 17 of the
Contract Act, 1872 defines ―fraud‖ as an act committed
35
by a party to a contract with the intent to deceive
another. From dictionary meaning or even otherwise
fraud arises out of a deliberate active role of the
representator about a fact, which he knows to be untrue
yet he succeeds in misleading the representee by
making him believe it to be true. The representation to
become fraudulent must be of fact with the knowledge
that it was false. In a leading English case
i.e. Derry v. Peek [(1886-90) All ER Rep 1 : (1889) 14 AC
337 (HL)] what constitutes ―fraud‖ was described thus :
(All ER p. 22 B-C)
―[F]raud is proved when it is shown that a false
representation has been made (i) knowingly, or (ii)
without belief in its truth, or (iii) recklessly, careless
whether it be true or false.‖
But ―fraud‖ in public law is not the same as ―fraud‖ in
private law. Nor can the ingredients, which establish
―fraud‖ in commercial transaction, be of assistance in
determining fraud in administrative law. It has been aptly
observed by Lord Bridge in Khawaja v. Secy. of State for
Home Deptt. [(1983) 1 All ER 765 : 1984 AC 74 : (1982)
1 WLR 948 (HL)] that it is dangerous to introduce
maxims of common law as to effect of fraud while
determining fraud in relation to statutory law. ―Fraud‖ in
relation to statute must be a colourable transaction to
evade the provisions of a statute.
―‗If a statute has been passed for some one
particular purpose, a court of law will not countenance
any attempt which may be made to extend the operation
of the Act to something else which is quite foreign to its
object and beyond its scope.’ Present-day concept of
fraud on statute has veered round abuse of power or
mala fide exercise of power. It may arise due to
overstepping the limits of power or defeating the
provision of statute by adopting subterfuge or the power
may be exercised for extraneous or irrelevant
considerations. The colour of fraud in public law or
administrative law, as it is developing, is assuming
different shades. It arises from a deception committed by
disclosure of incorrect facts knowingly and deliberately to
invoke exercise of power and procure an order from an
authority or tribunal. It must result in exercise of
jurisdiction which otherwise would not have been
exercised. That is misrepresentation must be in relation
36
to the conditions provided in a section on existence or
non-existence of which power can be exercised. But non-
disclosure of a fact not required by a statute to be
disclosed may not amount to fraud. Even in commercial
transactions non-disclosure of every fact does not vitiate
the agreement. ‗In a contract every person must look for
himself and ensures that he acquires the information
necessary to avoid bad bargain.’ In public law the duty is
not to deceive.‖ (See Shrisht Dhawan v. Shaw
Bros. [(1992) 1 SCC 534] SCC p. 554, para 20.)‖
26. The above extract would clearly indicate that a collusion or
conspiracy with a view to deprive the rights of others in relation to a
property would render the transaction void ab initio.
27. In Devendra Kumar Vs. Uttaranchal and Ors. : 2013 9 SCC
363, the Hon’ble Apex Court in para Nos.18 & 25 of the said
Judgment, has held as under:
―18. The ratio laid down by this Court in various
cases is that dishonesty should not be permitted to bear
the fruit and benefit those persons who have frauded or
misrepresented themselves. In such circumstances the
court should not perpetuate the fraud by entertaining
petitions on their behalf. In Union of India v. M.
Bhaskaran [1995 Supp (4) SCC 100 : 1996 SCC (L&S)
162 : (1996) 32 ATC 94 : AIR 1996 SC 686] this Court,
after placing reliance upon and approving its earlier
judgment in Vizianagaram Social Welfare Residential
School Society v. M. Tripura Sundari Devi [(1990) 3 SCC
655 : 1990 SCC (L&S) 520 : (1990) 14 ATC 766] ,
observed as under : (M. Bhaskaran case [1995 Supp (4)
SCC 100 : 1996 SCC (L&S) 162 : (1996) 32 ATC 94 :
AIR 1996 SC 686] , SCC p. 104, para 6)
If by committing fraud any employment is
obtained, the same cannot be permitted to be
countenanced by a court of law as the
employment secured by fraud renders it voidable
at the option of the employer.
37
25. More so, if the initial action is not in
consonance with law, the subsequent conduct of a party
cannot sanctify the same. Sublato fundamento cadit
opus — a foundation being removed, the superstructure
falls. A person having done wrong cannot take
advantage of his own wrong and plead bar of any law to
frustrate the lawful trial by a competent court. In such a
case the legal maxim nullus commodum capere potest
de injuria sua propria applies. The persons violating the
law cannot be permitted to urge that their offence cannot
be subjected to inquiry, trial or investigation. (Vide Union
of India v. Major General Madan Lal Yadav [(1996) 4
SCC 127 : 1996 SCC (Cri) 592 : AIR 1996 SC 1340]
and Lily Thomas v. Union of India [(2000) 6 SCC 224 :
2000 SCC (Cri) 1056] .) Nor can a person claim any right
arising out of his own wrongdoing (jus ex injuria non
oritur).‖
28. In the case of Indian Bank vs. Satyam Fibres (India) PVT.
LTD. : 1996 5 SCC 550, the Hon’ble Apex Court held in para Nos.20
to 23 as under:
―20. By filing letter No. 2775 of 26-8-1991 along with the
review petition and contending that the other letter,
namely, letter No. 2776 of the even date, was never
written or issued by the respondent, the appellant, in fact,
raised the plea before the Commission that its judgment
dated 16-11-1993, which was based on letter No. 2776,
was obtained by the respondent by practising fraud not
only on the appellant but on the Commission too as letter
No. 2776 dated 26-8-1991 was forged by the respondent
for the purpose of this case. This plea could not have
been legally ignored by the Commission which needs to
be reminded that the authorities, be they constitutional,
statutory or administrative, (and particularly those who
have to decide a lis) possess the power to recall their
judgments or orders if they are obtained by fraud as
fraud and justice never dwell together (Fraus et jus
nunquam cohabitant). It has been repeatedly said that
fraud and deceit defend or excuse no man (Fraus et
dolus nemini patrocinari debent).
38
21. In Smith v. East Elloe Rural Distt. Council [1956 AC
736 : (1956) 1 All ER 855 : (1956) 2 WLR 888] the House
of Lords held that the effect of fraud would normally be to
vitiate any act or order. In another case, Lazarus Estates
Ltd. v. Beasley [(1956) 1 QB 702 : (1956) 1 All ER 341 :
(1956) 2 WLR 502] (QB at p. 712), Denning, L.J. said:
―No judgment of a court, no order of a
Minister, can be allowed to stand if it has been
obtained by fraud. Fraud unravels everything.‖
22. The judiciary in India also possesses inherent power,
specially under Section 151 CPC, to recall its judgment
or order if it is obtained by fraud on court. In the case of
fraud on a party to the suit or proceedings, the court may
direct the affected party to file a separate suit for setting
aside the decree obtained by fraud. Inherent powers are
powers which are resident in all courts, especially of
superior jurisdiction. These powers spring not from
legislation but from the nature and the constitution of the
tribunals or courts themselves so as to enable them to
maintain their dignity, secure obedience to its process
and rules, protect its officers from indignity and wrong
and to punish unseemly behaviour. This power is
necessary for the orderly administration of the court’s
business.
23. Since fraud affects the solemnity, regularity and
orderliness of the proceedings of the court and also
amounts to an abuse of the process of court, the courts
have been held to have inherent power to set aside an
order obtained by fraud practised upon that court.
Similarly, where the court is misled by a party or the
court itself commits a mistake which prejudices a party,
the court has the inherent power to recall its order.
(See: Benoy Krishna Mukerjee v. Mohanlal Goenka [AIR
1950 Cal 287] ; Gajanand Sha v. Dayanand Thakur [AIR
1943 Pat 127 : ILR 21 Pat 838]
; Krishnakumar v. Jawand Singh [AIR 1947 Nag 236 :
ILR 1947 Nag 190] ; Devendra Nath Sarkar v. Ram
Rachpal Singh [ILR (1926) 1 Luck 341 : AIR 1926 Oudh
315] ; Saiyed Mohd. Raza v. Ram Saroop [ILR (1929) 4
Luck 562 : AIR 1929 Oudh 385 (FB)] ; Bankey Behari
Lal v. Abdul Rahman [ILR (1932) 7 Luck 350 : AIR 1932
Oudh 63] ; Lekshmi Amma Chacki Amma v. Mammen
39Mammen [1955 Ker LT 459] .) The court has also the
inherent power to set aside a sale brought about by fraud
practised upon the court (Ishwar Mahton v. Sitaram
Kumar [AIR 1954 Pat 450] ) or to set aside the order
recording compromise obtained by fraud. (Bindeshwari
Pd. Chaudhary v. Debendra Pd. Singh [AIR 1958 Pat
618 : 1958 BLJR 651] ; Tara Bai v. V.S. Krishnaswamy
Rao [AIR 1985 Kant 270 : ILR 1985 Kant 2930] .)‖
29. The facts involved in the case on hand would clinchingly
establish that one Sri Matsa Santa Rao, purportedly Officiating as
the President of the Society, has done the unilateral act of
registration of Sale Deeds in favour of the Writ Petitioners. As
indicated earlier that there was neither the Resolution passed by the
Managing Committee authorizing the President to execute Sale
Deeds nor has the said President adhered to the indispensible
statutory mandate by seeking permission from Respondent Nos.1
and 2 inasmuch as the Society is undoubtedly an Aided Society.
Even the General Body of the Respondent No.3 Society has not
approved/ratified any resolution. When once it is established that a
person, without any authority of law, has stealthily executed a Sale
Deed; such transactions and the documents/instruments involved in
such transactions would become void ab initio in the eye of law as if
the said sale was not a legally sustainable and valid sale at all. This
is, therefore, a case of res ipsa loquitur (things speaks to
themselves). It is also a settled law that the doctrine of res ipsa
40
loquitur is a rule of evidence when things are so glaring and
apparent on the face of record, it does not require adducing of any
further evidence.
Instruments which are ab initio void need not be cancelled:
30. Insofar as the ‗character’ of the Sale Deed as an instrument
which is executed by way of a sham transaction, the Hon’ble Apex
Court in Dhurandhar Prasad Singh v Jai Prakash University and
others: (2001) 6 SCC 534) in paragraph No.22 has held as under:
“Thus the expressions “void and voidable”
have been the subject-matter of consideration on
innumerable occasions by courts. The expression
“void” has several facets. One type of void acts,
transactions, decrees are those which are wholly
without jurisdiction, ab initio void and for avoiding
the same no declaration is necessary, law does not
take any notice of the same and it can be
disregarded in collateral proceeding or otherwise.
The other type of void act, e.g., may be transaction
against a minor without being represented by a next
friend. Such a transaction is a good transaction against
the whole world. So far as the minor is concerned, if he
decides to avoid the same and succeeds in avoiding it
by taking recourse to appropriate proceeding the
transaction becomes void from the very beginning.
Another type of void act may be which is not a nullity
41
but for avoiding the same a declaration has to be made.
Voidable act is that which is a good act unless avoided,
e.g., if a suit is filed for a declaration that a document is
fraudulent and/or forged and fabricated, it is voidable as
the apparent state of affairs is the real state of affairs
and a party who alleges otherwise is obliged to prove it.
If it is proved that the document is forged and fabricated
and a declaration to that effect is given, a transaction
becomes void from the very beginning. There may be a
voidable transaction which is required to be set aside
and the same is avoided from the day it is so set aside
and not any day prior to it. In cases where legal effect of
a document cannot be taken away without setting aside
the same, it cannot be treated to be void but would be
obviously voidable.”
31. The above extract would indicate that the Hon’ble Apex
Court has drawn the distinction between ‗void’ transactions and
‗voidable’ transactions and that the expression void has several
facets. It is stated that in respect of certain classes of
transactions which are ab initio void, such transactions can
simply be avoided and no declaration is necessary because the
law does not take any notice of such instruments and they can
be disregarded in collateral proceedings or otherwise.
32. Similarly, the Hon’ble Apex Court has categorically held
that when an instrument is void ab initio, a decree for setting
42
aside the same would not be necessary as the same is non est
in the eye of law inasmuch as it would be a nullity. In Prem
Singh and others v Birbal and others: ((2006) 5 SCC 353),
the Hon’ble Apex Court has also held that in a case of sham
transaction, which is not executed by a lawful owner by
following the legal procedure, the ‗character’ of the very
document itself is void. The relevant portions of the Judgment at
paragraph Nos. 16 and 22 are usefully extracted herein:
“16. When a document is valid, no question arises
of its cancellation. When a document is void ab initio, a
decree for setting aside the same would not be
necessary as the same is non-est in the eye of law, as it
would be a nullity.
22. In Ningawwa v. Byrappa [(1968) 2 SCR 797 : AIR
1968 SC 956] this Court held that the fraudulent
misrepresentation as regards character of a document is
void but fraudulent misrepresentation as regards
contents of a document is voidable stating: (SCR p. 801
C-D)
“The legal position will be different if there is a
fraudulent misrepresentation not merely as to
the contents of the document but as to its
character. The authorities make a clear
distinction between fraudulent
misrepresentation as to the character of the
document and fraudulent misrepresentation as
to the contents thereof. With reference to the
43former, it has been held that the transaction is
void, while in the case of the latter, it is merely
voidable.”
In that case, a fraud was found to have been played and
it was held that as the suit was instituted within a few
days after the appellant therein came to know of the
fraud practised on her, the same was void. It was,
however, held: (SCR p. 803 B-E)
“Article 91 of the Limitation Act provides that a suit
to set aside an instrument not otherwise provided
for (and no other provision of the Act applies to
the circumstances of the case) shall be subject to
a three years’ limitation which begins to run when
the facts entitling the plaintiff to have the
instrument cancelled or set aside are known to
him. In the present case, the trial court has found,
upon examination of the evidence, that at the very
time of the execution of the gift deed, Ext. 45 the
appellant knew that her husband prevailed upon
her to convey Surveys Plots Nos. 407/1 and 409/1
of Tadavalga village to him by undue influence.
The finding of the trial court is based upon the
admission of the appellant herself in the course of
her evidence. In view of this finding of the trial
court it is manifest that the suit of the appellant is
barred under Article 91 of the Limitation Act so far
as Plots Nos. 407/1 and 409/1 of Tadavalga
village are concerned.”.
44
33. The Hon’ble Apex Court, as recently as in the year 2023,
while dealing with an identical situation, held that in respect of a
sham transaction, cancellation of Sale Deed would not be
necessary. In Ramathal and others v K. Rajamani (Dead)
through LRs and another : (2023 SCC Online SC 1022) in
paragraph No.21, the Hon’ble Apex Court has held as under:
” In the present case, the defendant respondent had
taken a plea which the High Court had given due
consideration that the plaintiff appellant had not sought
any relief either for declaration of the Power of Attorney as
void as also the cancellation of the sale deeds. Law is
well settled that where it is alleged that the document
of sale is void, then no cancellation would be
necessary and such a document can be ignored
under law. Cancellation of a sale deed would be
necessary only where it is alleged to be voidable on facts.
The present case the fraudulent misrepresentation was
not only to the contents of the document but also to the
character of the document. Thus, the reasoning given by
the High Court contrary to the settled legal position cannot
be sustained”.
34. Since the Writ Petitioners have placed heavy reliance on the
Judgments cited hereinabove, this Court deems it necessary to deal
with the facts and the ratio in each of the precedents.
45
34.1 In Thota Ganga Laxmi and Another Vs. Government of
Andhra Pradesh [(2010) 15 SCC 207], the Hon’ble Apex Court was
dealing with the effect of Cancellation Deed in a situation where
there is no controversy with regard to the legitimacy on the part of
the Vendor when he had executed the initial ‗Sale Deed’ as such. In
the said case, the original Sale Deed was legitimately registered and
during the process of registration of the Sale Deed, Vendor’s right to
transfer title to the Vendee was never doubted. Therefore, this
precedent is of no avail to the Writ Petitioners.
34.2 The Writ Petitioners have placed reliance on Judgment
rendered by the Division Bench of this Hon’ble Court in M. Venkata
Ramana and another Vs. A.P Co-operative Tribunal, Hyderabad
[2010 (4) ALT 34 (D.B)]. The learned Senior Counsel relied on Para
Nos.26 & 27, 51 to 53. A close scrutiny of this Judgment would
make it clear that the facts in this case are not identical to the facts
in the present case. In the cited Judgment, the Hon’ble Division
Bench had categorically held:
―when once, the sale deeds are executed and registered, title in
the property covered by the sale deeds gets legally transferred in
favour of the vendees and even the vendor cannot unilaterally
cancel the same. In case, the transaction is found to be illegal and
beyond the authority of the society, necessary recourse has to be
taken to the provisions of Specific Relief Act, which provides for
cancellation of documents and decrees‖.
46
34.3 Therefore, the facts in M. Venkata Ramana‘s case, do not
support the case of the Writ Petitioners. In the present case, the
person who has no authority under law had deceptively and
stealthily registered the Sale Deeds ostensibly projecting himself to
be having the legal authority to transfer the title from the Society to
the Vendees. The President of Respondent No.3 Society would get
the legal authority to register a Sale Deed on behalf of the Society
only when the procedures contemplated under law are followed and
thereby the necessary approvals are given by the : a) Managing
Committee; b) Ratified by the General Body; and c) Permission
granted by the Government and Functional Registrar. Since the Writ
Petitioners have failed to prove that all such Resolutions, approvals
and sanctions have been granted to Sri Matsa Santa Rao, he as
such does not have the authority to register the Sale Deeds on
behalf of the Society in favour of the Writ Petitioners herein.
34.4 The learned Senior Counsel has placed reliance on the
Judgment of the Hon’ble Apex Court in Satya Pal Anand Vs. State
of Madhya Pradesh and Others [(2016) 10 SCC 767. This Court
has sifted through the facts of the case (stated in Para Nos.4 & 5 of
the Judgment), and the analysis and the ratio therein. The facts
involved in this case are not identical to the facts in the present
47case. The facts in Satya Pal Anand‘s case would indicate that the
Society has sold a plot to its member and legitimately executed a
registered document in favour of the member. The member has
violated some of the conditions, which are indispensible, that led to
cancellation of the plot by the Society therein. Thereafter, the
Society has once again registered the very same plot in favour of
another member. The crucial fact here is that the Society, at the
time of registration of a plot to its member at the first instance, not
only had valid title but also had the legitimate authority to effect sale
by transfer, and therefore, had validly transferred such title in favour
of its member. Since this Court has already taken the view that in
the present case there is no valid flow of title inasmuch as all the
transactions were sham because Sri Matsa Santa Rao did not have
the legitimacy to either sell the land or transfer its title on behalf of
the Society, the reliance placed by the learned Senior Counsel on
Satya Pal‘s case would be of no avail.
34.5 This apart, the facts on record would also indicate that the Writ
Petitioners have grossly failed to even establish elementary fact that
the sale consideration has passed from the vendees to the Society.
Despite the fact that the Official Respondents have categorically
stated in para 19 of the Counter Affidavit that not a single paisa of
48
sale consideration has been passed on to the Respondent No.3
Society, the Writ Petitioners, though had filed Re-joinders, had not
been able to satisfactorily rebutt this contention that the valid
consideration has not been passed to the Respondent No.3 Society.
In the above facts, this Court would also not hesitate to hold that the
entire transactions of sale made by Sri Matsa Santa Rao and
purchased by the Writ Petitioners are completely sham in nature. At
the first instance, the vendor had no authorization to effect sale. At
the second instance, the vendees did not prove that the valid sale
consideration has been passed on to the Society.
Conclusion:
In the above premise, the Issues are answered in the
following manner:-
35. ISSUE No.1: Whether the Respondent No.3 – The Eluru
Weavers Co-operative Production & Sale Society has received
the State Aid?, If yes, whether the Resolutions passed by the
Managing Committee are required to be approved/ratified
firstly by the General Body, and thereafter, be approved by the
Functional Registrar (Respondent No.2 herein)?
As indicated earlier, the Eluru Weavers Cooperative
Production and Sale Society, since it has received state aid, the said
Society is held as Aided Society and therefore, it requires the ‗prior
permission’ of the Competent Authority, (Functional Registrar in the
49
present case) for selling the properties belonging to the Society. It is
also necessary for the Managing Committee to pass a Resolution to
this effect that it has become expedient to sell the properties of the
Society for the purpose of raising funds or for any other valid reason
and refer the said Resolution to the Competent Authority for its
approval after getting the approval/ratification from the General
Body. In the absence of a Resolution and or approval by the General
Body and the Competent Authority, any sale effected would be void
ab initio. It is pertinent to mention herein that Sri Matsa Santa Rao
has also conceded to this position that a prior sanction is required
from the Government, which had been noted by this Court in the
preceding paragraphs.
36. ISSUE No.2: Whether the Managing Committee has passed
a resolution bearing Resolution No.52 on 10.07.2015
authorising the President of the Society to sell the immovable
property owned by the Respondent No.3 Society? If yes,
whether such Resolution was approved/ratified by the General
Body ?
The Letter addressed by all the Members of the Managing
Committee, other than the President- Sri Matsa Santa Rao, to the
Functional Registrar stating that Sri Matsa Santa Rao, purportedly
acting as the President of the Society, is selling away the lands
belonging to the Society and the said Managing Committee
50
Members had urged the Respondent No.2 to take over the
management of the Society. This Letter does not refer to any earlier
Resolution, much less, Resolution No. 52. This apart, no such
Resolution No. 52 had been produced before this Court by the Writ
Petitioners too. In this view of the matter, this Court holds that
Resolution No. 52, which is purportedly passed on 10.07.2015 is
non-existent. Therefore, it has to be deemed that the Managing
Committee of the Society had never resolved to sell the properties of
the Society nor has authorized its President to execute the Sale
Deeds. When such Resolution does not exist, the question of the
General Body approving/ratifying does not arise as such.
37. ISSUE No.3: Whether the valid sale consideration, while
effecting the purported sale transactions (in the form of
Registered Sale Deeds dated 11.01.2016 and 18.01.2016),
had been deposited into the Respondent No.3 Society’s bank
account or not?
A specific plea has been raised by the Official Respondent
No.2 at paragraph No.19 of its Counter Affidavit that no sale
consideration has been passed on to the Society and therefore, the
entire transaction is a sham one. This Court has already noted in the
preceding paragraphs that the Writ Petitioners, despite the fact that
they have filed their Rejoinder, have not addressed this issue with
any documentary proof to evidence that valid consideration which is
51
paid by the Writ Petitioners had been passed on to the Society by
depositing the said amount into the Bank Account of the Society.
The Writ Petitioners, having miserably failed in producing even a
scrap of paper evidencing the factum of payment of sale
consideration in favour of the Society, this Court holds that the entire
transaction between Sri Matsa Santa Rao and the Writ Petitioners is
a sham one.
38. ISSUE No.4: Whether Sri Matsa Santa Rao, the then
President of the Society has individually committed fraud?
Having considered the relevant facts, this Court would not
hesitate to hold that Sri Matsa Santa Rao, who was the then
President of the Society, has individually committed fraud not only on
the Society but also on the vendees, who are the Writ Petitioners
herein.
39. ISSUE No.5: Whether the rightful owner i.e., the Society,
acting through the Management Committee, has authorized
any one, particularly Sri Matsa Santa Rao, to sell the subject
plots and to execute Registered Sale Deeds in favour of the
Writ Petitioners?
Admittedly, the rightful owner of the land is the Society. The
said Society having receiving aid from the Government would fall
under the category of Aided Society and therefore, is duty-bound to
follow the statutory requirement of obtaining prior permission from
52
the Competent Authority, namely the Functional Registrar for selling
the properties of the Society. As indicated earlier, proposal for sale
of the properties of the Society shall be made by way of Resolution
with the participation of the Members of the Managing Committee,
thereafter the General Body of the Society should approve/ratify the
same and then refer the same to the Respondent No.2 for seeking
permission for selling the assets of the Society. As a last step in the
mandatory procedure, such Resolution ought to have been approved
by the Respondent No.1 & Respondent No.2. Only then the
President would get the authority to effect sale of the property of the
Society by executing the Sale Deeds. In the instance case, none of
the procedures have been followed. The Letter addressed by the
Members of the Managing Committee to the Respondent No.2 dated
20.02.2016 (at page no.113 of the Counter Affidavit) would add
strength to the fact that the Managing Committee of the Society has
neither thought about nor deliberated regarding the selling away of
the immovable properties of the Society and that the entire set of
falsities have been concocted by Sri Matsa Santa Rao that
eventually led to the execution of the Sale Deeds clandestinely,
which are ex facie sham by their very nature and ‗character’.
53
40. ISSUE No.6: Whether the Sale Deeds executed by Sri Matsa
Santa Rao in favour of the Writ Petitioners vide Sale Deeds
dated 11.01.2016 and 18.01.2016 are legally valid? If not,
whether the Sale Deeds executed by Sri Matsa Santa Rao are
voidable or void ab initio?
In view of the foregoing discussion, this Court would not
hesitate to hold that the Sale Deeds executed by Sri Matsa Santa
Rao are illegal by their very nature and character and therefore, the
said Sale Deeds dated 11.01.2016 and 18.01.2016 are ab initio void.
41. ISSUE No.7: Whether there is any requirement in law to
execute a Cancellation Deed to annul the purported Sale
Deeds, which are sham by their very character?
It is settled law that neither a Civil Court is required to declare
the said documents as void nor is there any requirement to execute
the Cancellation Deeds to annul the sham transactions. The
Judgments referred to hereinabove, rendered by the Hon’ble Apex
Court would categorically state that the Sale Deeds which are by
their very character itself are void ab initio and hence need not be
cancelled. However, the present set of facts would indicate that the
respondent No.2 has registered Cancellation Deeds on 15.02.2016.
Though there is no such requirement, perhaps the Respondent No.2
has executed such Cancellation Deeds on 15.02.2016 only to make
it explicitly clear that the Sale Deeds executed by Sri Matsa Santa
Rao would not have any effect in the eye of law. At the most, it can
54
only be said that as a matter of ‗abundant caution’, the Respondent
No.2 had executed the Cancellation Deeds on 15.02.2016 and in
order to prevent further sales by the Writ Petitioners herein. There
could also be another reason that even in the Registrar’s Record,
the factum of cancellation of the Sale Deeds dated 11.01.2016 and
18.01.2016 would be recorded which would definitely prevent further
fraud.
42. Under such circumstances, this Court would hold that the
Respondent No.2, who is the Functional Registrar, has the authority
to register the Cancellation Deeds executed on 15.02.2016.
43. ISSUE No.8: To what relief?
(i) The Writ Petitioners have not been able to produce any
evidence to establish the fact that the Managing Committee has
passed a Resolution bearing No.52 on 10.07.2015. Even assuming
for a moment that a Resolution has been passed by the Managing
Committee on 10.07.2015, a copy of it is not available with the Writ
Petitioners. Extensive correspondence which is placed by the Official
Respondent No.2 along with the Counter Affidavit would indicate
that such alleged Resolution has not seen the light of the day and
even if it exists, it has never been approved/ratified by the General
Body. Since this Court has taken a view that the Respondent No.3
55
Society is an aided one (receiving Government-Aid), the alleged
Resolution purported to have been made by the Managing
Committee, is certainly required to be approved by Respondent
Nos.1 & 2 as per the statutory procedure, after having been
approved/ratified by the General Body. While the Writ Petitioners
would canvass that the President of the Society Sri Matsa Santa
Rao has executed the Sale Deeds on 11.01.2016 and 18.01.2016
on behalf of the Society, the documentary evidence placed by
Respondent No.2 along with the Counter Affidavit would completely
defy the contentions of the Writ Petitioners. As discussed in the
foregoing paragraphs, the President of the Society has in fact
agreed to the legal requirement that Respondent Nos.1 & 2 have to
give a prior consent and a prior approval with regard to any proposal
for selling the immovable property of the Society. In the said
correspondence (which is on record), the President of the Society
has even stated that he would approach the Respondent Nos.1 & 2
for seeking their permission/approval for selling the immovable
property of the Society. While the President of the Society, by his
correspondence, had made the Respondent Nos.1 & 2 to believe
that the Society will certainly seek permission from Respondent
Nos.1 & 2 for sale of the immovable property in the month of
56
December, 2015, he had clandestinely and without providing any
information to Respondent Nos.1 & 2, much less seeking
permission, had surreptitiously and clandestinely sold away the
immovable property of the Society thereby, defrauding not only the
Society but also the Government.
(ii) This apart, despite a strong opposition made by the Official
Respondents with regard to transfer of sale consideration from the
Writ Petitioners to the Society, even in the Re-joinder filed by the
Writ Petitioners, they have not provided any plausible answer nor
were able to produce even a scrap of paper to indicate that the sale
consideration was in fact remitted to the Society’s account.
(iii) Another pertinent fact, which can never be ignored, is
that the Respondent No.2 as well as the members of the Managing
Committee have been diligent all throughout. This fact is clearly
reflected from the correspondence between the Respondent No.2
and Sri Matsa Santa Rao on one hand and between Respondent
No.2 and the members of the Managing Committee on the other
hand. Even the Reports submitted by the District Co-operative
Officer dated 17.02.2016 and the lodging of the FIR under Sections
408 and 420 of IPC bearing F.I.R.No.25 of 2016 dated 12.02.2016
would clearly indicate that the due diligence was exercised by
57
everyone. However, the President Sri Matsa Santa Rao had
executed the sham Sale Deeds stealthily and by hoodwinking every
one, thereby causing colossal loss to the Respondent No.3 Society.
(iv) In the present case, the Writ Petitioners have not been
able to prove that Resolution No.52 was passed by the Managing
Committee. The Writ Petitioners have not been able to prove that
such Resolution, has at all been approved by the General Body.
The Writ Petitioners have not been able to prove that the
Respondent No.3 Society is an Un-aided Society. The Writ
Petitioners have not been able to prove that the Respondent No.3
has not received any aid from the Government. The Writ Petitioners
have not been able to prove that even single paisa has been
remitted to the account of the Respondent No.3 Society in the form
of Sale Consideration (although, in the registered Sale Deeds, it is
stated that the Writ Petitioners paid in cash). On the contrary, the
President of the Respondent No.3 Society, in his correspondence
has categorically agreed to the legal position that no sale can be
effected by him without seeking permission from the Government
and the Functional Registrar. Taking these facts in to consideration,
this Court has categorically held that entire transaction has been
fraudulently, stealthily and ostensibly committed by the President in
58
his individual capacity by registering the Sale Deeds with an intent to
defraud the Society and the Government. Therefore, the
Registration of Sale Deeds done by Sri Matsa Santa Rao is ex-facie
illegal, and therefore, this Court would have no hesitation to hold that
there is no valid transfer of title from Respondent No.3 Society to the
Writ Petitioners herein.
(v) The precedents which are relied on by the learned Senior
Counsel appearing for the Writ Petitioners are of no avail, for the
simple reason that, the facts as well as the prepositions of law are
not identical to the Judgments cited by the learned Senior Counsel.
There must be valid transfer of title through the registered Sale Deed
because the Vendors therein in fact possessed valid title and there
was no controversy with regard to the passing of sale consideration
from the Vendee to the Vendor.
(vi) It is pertinent to mention herein that the age of Sri
Masta Santa Rao is shown in the Sale Deeds dated: 11.01.2016
and 18.01.2016 (Ex.P.2), as being 101 years (with Aadhar No.
3632 0876 3222) as on the date of their executions.
(vii) In the above premise, no relief can be granted to the Writ
Petitioners except giving liberty to them to proceed individually
against Sri Matsa Santa Rao in accordance with law for recovery of
59
sale consideration from him, if at all the Writ Petitioners have any
proof/evidence to at least establish the transfer of sale consideration
from the Writ Petitioners to Sri Matsa Santa Rao in his individual
capacity. This Court would not hesitate to hold that the Writ
Petitioners are not entitled to initiate any proceedings against the
Society (Respondent No.3) for recovery of the alleged sale
consideration because of the reason that the Writ Petitioners have
failed to prove the transfer of ‗sale consideration’ to the Society
(Respondent No.3). For these reasons, no relief can be granted to
the Writ Petitioners.
(viii) Even reliance placed by Writ Petitioners on Rule 26(k)(i)
of the Andhra Pradesh Registration Rules, 1960 would not help the
Writ Petitioners in any manner.
44. In view of the foregoing discussion, this Court would hold that
the impugned Cancellation Deeds dated 15.02.2016 shall not be set
aside and the present Writ Petitions are devoid of any merit besides
being an abuse of process.
45. Accordingly, the Writ Petitions are dismissed. No order as to
costs. However, the Writ Petitioners are given liberty to initiate
appropriate proceedings against Sri Matsa Santa Rao in his
individual capacity before the Civil Court, if so advised, for recovery
60
of the payments allegedly made by them in the form of sale
consideration to Sri Matsa Santa Rao (in the form of „cash‟ as
mentioned in the Sale Deeds dated 11.01.2016 and 18.01.2016-
Ex.P.2) subject to the production of legally admissible
evidence/proof and trial without reference to the statutory period of
limitation if the suit is filed within a period of six (6) months from the
date of uploading of this judgment on the website of this Court.
46. Interlocutory Applications, if any, stand closed in terms of this
order.
______________________________________
GANNAMANENI RAMAKRISHNA PRASAD, J
Dt: 27.12.2024
SDP/Vns/eha/JKS
61
194
HON’BLE SRI JUSTICE GANNAMANENI RAMAKRISHNA
PRASAD
WRIT PETITION Nos.7691, 6519, 7583, 7614,
7683, 7686, 7759 of 2016
Dt: 27.12.2024
SDP/Vns/eha/JKS