Suit For Redemption Of Mortgage Sold Pursuant To Award Under UP Co-operative Societies Act Barred U/S 111(d): Allahabad High Court

The Allahabad High Court has held that a civil suit seeking redemption of a mortgaged property which has already been sold pursuant to an award passed under the UP Co-operative Societies Act, 1965 is barred under Section 111(d) of the Act, as the relief cannot be granted without interfering with the award.Section 111 of the UP Co-operative Societies Act, 1965 bars the jurisdiction of civil and revenue courts in matters under the Act. Clause (d) extends the bar to any other order or award made under the Act.Justice Anish Kumar Gupta held,“… unless the award passed by the arbitrator, under the provisions of UP Co-operative Societies Act is set aside or interfered with, the relief claimed by the appellant herein cannot be granted and any interference with the award passed under the provisions of UP Co-operative Societies Act is not permitted by the civil court, which is expressly barred under Section 111(d) of UP Co-operative Societies Act.”Appellant's predecessor-in-interest stood guarantor to a loan advanced by the Noida Commercial Co-operative Bank, a co-operative society established under the UP Co-operative Societies Act, 1965, to M/s Sangwan Heights Private Limited, and mortgaged a 2630 sq. mt. property situated in Village Bhowapur, District Ghaziabad by deposit of the original title deeds. By a registered sale deed dated 18.09.2014, he sold the property to the appellant, who claimed to be its owner in possession since then.When the company defaulted in repayment of the loan, arbitration proceedings were initiated under the UP Co-operative Societies Act, 1965. An award was passed in favour of the bank on 8.11.2019, modified on 11.03.2020, directing the company and its directors to deposit Rs. 1,35,16,345/- in three equal monthly instalments, failing which the bank was permitted to sell the mortgaged property to recover the amount. On their failure to deposit, the bank sold the property to respondent no. 2 in a public auction, whereafter a sale certificate was issued and a sale deed was executed in his favour.The appellant first filed a civil suit for permanent injunction and cancellation of the sale deed executed in favour of respondent no. 2, which is stated to be pending with no interim order in his favour. Thereafter, he filed a second suit claiming the right of redemption of the mortgage. Respondent no. 2 filed an application under Order VII Rule 11 CPC raising four grounds for rejection of the plaint. Though the trial court decided three of the four grounds in favour of the appellant, it held that the suit was barred under Section 111(d) of the UP Co-operative Societies Act, 1965 and rejected the plaint.Appellant approached the High Court in First Appeal. The Court observed that the appellant sought redemption of the mortgaged property along with a declaration that the sale deed dated 10.01.2022 executed in favour of respondent no. 2 was illegal and void. Since the sale deed was executed pursuant to the award passed under the UP Co-operative Societies Act, the Court held that the relief could not be granted unless the award was set aside or interfered with, which was expressly barred under Section 111(d) of the Act.The Court observed that “there is no quarrel that for deciding the application under Order VII Rule 11 CPC, only the averments made in the plaint are to be taken into consideration”. Noting that averments made in the plaint were considered by the Trial Court, the Court dismissed the appeal. Case Title: Vijendra Singh Alias Bijendra Singh v. Noida Commercial Cooperative Bank Ltd. And Another 2026 LiveLaw (AB) 363Citation : 2026 LiveLaw (AB) 363Counsel for Appellant :- Syed Fahim AhmedCounsel for Respondent :- Akshat Sinha, Gyanendra Kumar Singh, Sanyukta SinghClick Here To Read/Download Order

Suit For Redemption Of Mortgage Sold Pursuant To Award Under UP Co-operative Societies Act Barred U/S 111(d): Allahabad High Court

Upasna Agrawal

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Suit For Redemption Of Mortgage Sold Pursuant To Award Under UP Co-operative Societies Act Barred U/S 111(d): Allahabad High Court

Upasna Agrawal

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