JUDGMENT
J.B. Koshy, J.
1. Petitioner is a Co-operative Bank. Fifth respondent has availed a loan of Rs. 60,000/- from the petitioner bank by hypothecating his properties measuring one acre and 31 cents in Meenachil Taluk by deposit of title deeds. Since fifth respondent did not pay the loan amount and interest, petitioner approached the Arbitrator functioning under the provisions of the Kerala Co-operative Societies Act and an Award was passed. It is stated that when steps for execution of the Award were in progress, it is averred by the petitioner that, revenue recovery proceedings were initiated by the fourth respondent Tahisildar against the fifth respondent fro realisation of Abkari dues and steps were taken to sell the properties in question which was hypothecated to the petitioner. Therefore, petitioner informed the Tahsildar about the hypothecation. The date of hypothecation of the documents on the bank was 15.3.1985.
2. Fifth respondent was an abkari contractor. He got the licence after completing all the formalities and after giving the very same properties including the solvency certificate. The above solvency certificate was given on 8.3.1985. It is the contention of the petitioner that Toddy Workers’ Welfare Fund dues will fall only towards the end of May and the property was mortgaged before that and, therefore, petitioner bank has got the first charge and arbitration award is equivalent to a decree of the civil court and, therefore, sale conducted in pursuance of the revenue recovery proceedings taken against the fifth respondent towards his abkari dues has to be set aside as petitioner has got first charge on the property.
3. It is not disputed that the solvency certificate covering this property was taken on 8.3.1985. R 5(2) of the Abkari Shops (Disposal in Auction) Rules, it is stated that:
“Where a person bids as an agent for another he shall not be recognised unless he produces to the officer conducting the sale a duly executed power of attorney from his principal. The agent having the Power of Attorney shall also produce a certificate to the effect that he does not have any dues to Government on the date of auction. Otherwise the agents shall not be permitted to take part in the auction and to sign in the bid list”.
In view of the above statutory provision, any hypothecation effected to the bank, subsequently, is illegal. Only after the property was offered as security in the solvency certificate, the land was hypothecated to the bank by deposit of title deeds. That is on 15.3.1985. Since solvency certificate was given for getting the licence of Abkari Shops, the contention of the bank that it has got a first charge cannot be accepted as there is a statutory rule preventing the same. Apart form the above, it is also noted that the land was put for sale in auction. First auction was on 7.1.1989. Subsequently, the sale was set aside not for the reason that it was mortgaged to the bank; but for non-deposit of sufficient amount and second auction was confirmed in favour of sixth respondent on 17.1.1990. So, it can be seen that the Award was sought to be executed by the bank only after proceedings for sale was started by the revenue recovery authorities. Attachment in revenue recovery proceedings was made on 29.1.1987. Even the arbitration proceeding were not started on that date. The property was attached by the Tahsildar by initiating revenue recovery proceedings before filing of arbitration proceedings. Therefore, sale of the above property in revenue recovery proceedings was over before execution proceedings started in pursuance of the Award.
4. I also note that after giving this land for obtaining the solvency certificate, the defaulter alienated the land to Joseph George and he filed a civil suit in the Munsiff’s Court, Pala against the revenue recovery proceedings. The case was dismissed on 15.11.1998. This court also dismissed the same in C.R.P. No. 1300/88. In all these cases, the petitioner bank remained silent. In view of the statutory provisions quoted above, hypothecation of the property to the bank itself was illegal and revenue recovery proceedings taken against the fifth respondent and the sale of the land in question is perfectly in order.
I see no ground to set aside the same and I dismiss the Original Petition.