KARNATAKA AGRICULTURALIMPLEMENTS AND ALLIED INDUSTRIAL CO-OPERATIVE SOCIETY LTD ,DHARWAD Vs. KARNATAKA STATE FINANCIAL CORPORATION

JUDGEMENT

(1.) The plaintiff has assailed the judgment of the III Addl. Sr. Civil Judge, Hubballi, in O.S.No.141/2012. The subject matter of the suit is five plots in all measuring 29 guntas 9 anas out of 2 acres 1 gunta 8 anas in block no. 281/1A of Bhairidevarakoppa, Hubballi (hereafter referred to as 'suit property'). He sought two reliefs of declarations, firstly that the auction conducted by the first defendant with respect to suit property was illegal and void, and secondly that the sale deed dated 23.08.2007 executed by the first defendant in favour of the second and third defendants was sham, nominal and null and void; and did not bind his interest.

(2.) The plaintiffis a co-operative society involved in manufacture and sale of agriculturalimplements. It was carrying on its business in the suit property. For its business activities, it availed loan of Rs. 9,00,000/- from Karnataka State Financial Corporation i.e. the first defendant on the security of the suit property, and a sum of Rs. 50,00,000/- from Karnataka Central Co-operative Bank, Hubballi ('KCC Bank' for short), second charge was created on the suit property for this loan.

(3.) As the plaintiff became a chronic defaulter, the first defendant exercised the statutory power under Section 29 of the State Financial Corporation Act (for short, the 'Act'), took over the possession of the suit property and brought it for auction. In the first sale held in the year 2005, the suit property was auctioned for Rs. 54,00,000/-, but the purchaser defaulted to deposit the money and therefore the sale was cancelled. Again sale was held on 23.08.2007 and the defendants No.2 and 3 purchased the suit property for Rs. 30,00,101/-.