Summary
The High Court set aside a cooperative bank’s auction of mortgaged properties for alleged procedural violations. The Court restored the sale, holding that the borrower had not invoked the prescribed timely challenge or established substantial injury. The borrower-obtained stay did not trigger the fresh-proclamation requirement for a discretionary adjournment, and the purchaser’s balance payment within fifteen days of the required approval was accepted as compliant on these facts.
Issues
- Whether the borrower’s later challenge justified setting aside the confirmed auction.
- Whether the intervening stay required a fresh proclamation and whether the purchaser’s payment complied with the applicable procedure.
Provisions considered
- Rule 107(14), Maharashtra Co-operative Societies Rules, 1961Failure to challenge within thirty days and absence of a finding of substantial injury weighed against invalidating the confirmed sale. (¶ 7-7.2)
- Rule 107(11)(f), Maharashtra Co-operative Societies Rules, 1961The fresh-proclamation requirement for discretionary adjournments did not apply to this borrower-obtained stay; earlier proclamations met the notice interval. (¶ 8-9)
- Rule 107(11)(g) and (h), Maharashtra Co-operative Societies Rules, 1961Immediate payment of fifteen per cent and payment of the balance within fifteen days of the approval required by the circular were accepted as compliant in this case. (¶¶ 10, 12)
Held
- Having itself held the borrower’s revision incompetent, the High Court ought not to have considered on merits the writ challenge to the revisional order. (¶ 6.1)
- The borrower neither sought timely relief under the prescribed sale-challenge procedure nor raised the available irregularity objections at the proper stage. After confirmation, such a belated challenge would normally defeat the statutory scheme. The High Court also recorded no substantial injury attributable to an irregularity. (¶¶ 7-7.2, 11)
- The auction occurred within seven days after the borrower’s stay was vacated. The stay period was excluded; the discretionary-adjournment proviso could not be used to reward the borrower’s own intervention. Earlier proclamations, distinguished from the later tender notice, also defeated the finding of insufficient notice. (¶ 8-9)
- The purchaser paid fifteen per cent immediately and the balance within fifteen days after receipt of the required approval. The Court found no payment-rule breach on that chronology and distinguished the authorities relied upon against the sale. (¶¶ 10, 12)
- Both appeals were allowed, the High Court judgment was set aside and the borrower’s writ petition dismissed, without costs. (¶ 13)
Result
Appeals allowed. High Court judgment cancelling the auction sale set aside; borrower’s writ petition dismissed. No order as to costs.