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Ludovico Sagrado Goveia v. Cirila Rosa Maria Pinto and Ors. - (Supreme Court) (06 Sep 2016)

A charge of malafides has to be made out with great clarity and particularity


Trusts and Societies

Present appeal is filed by successful purchaser at an auction held in execution of an order of the Assistant Registrar of Cooperative Societies passed under Section 76 of Multi State Cooperative Societies Act, 1984. High Court held that, Multi State Co-operative Societies Act, 1984 was repealed by Multi State Co-operative Societies Act, 2002. According to High Court, new Act deems an award passed by Assistant Registrar as an award in an arbitration case, which is executable only under Arbitration and Conciliation Act, 1996, and this being case, auction proceedings were set aside by High Court stating that, award dated 5th October, 2002 would be liable to be executed only in manner provided by 1996 Act. Appellants submitted that, all legal proceedings that had been initiated under 1984 Act would continue under that Act. As execution proceedings were initiated prior to 19th August, 2002, which is date of coming into force of 2002 Act, said proceedings would be saved despite repeal of 1984 Act by 2002 Act.

Section 126(6) of State Co-operative Societies Act, 2002 provides that, any legal proceeding pending before any authority at the commencement of 2002 Act shall be continued to be before that authority as if 2002 Act had not been passed. Proceeding in execution initiated under Section 85(c) of 1984 Act and pending before authorities under said Act prior to 19th August, 2002, would continue unhindered by repeal of 1984 Act by 2002 Act.

On facts of this case, that at no stage were Respondent-borrowers ready to pay back entire money borrowed by them as far back as in 1997. A Writ Petition was filed in 2007 without attempting to set aside certificate of sale granted under either Rule 37(13) or (14) of Multi State Co-operative Society Rules, 2002. It is not the Appellant's case that, property has been sold at an undervalue. Opportunity to have sale certificate set aside under Rule 37(13) has not been availed.

For Petitioner to make out such a ground, he has first to apply to recovery officer within 30 days from date of sale. And further, Appellant has to make out a case that he has sustained substantial injury by reason of such irregularity. A charge of malafides has to be made out with great clarity and particularity. Also, Appellant cannot claim to be in dark as every auction sale was publicly advertised in newspapers.


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