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TMI Blog2016 (11) TMI 1764X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire amount. However, there was still a shortfall of Rs. 18,75,791.40. The debtor, instead, represented before the ARCS that he was not liable to pay any further amount in excess of the amount already deposited by him until 22nd September 2011 totalling Rs. 61,89,125/-. In the facts of the present case, it is only upon deposit of the entire awarded amount, the request of the debtor to absolve him of his liability could be entertained. Once the auction sale is confirmed by the Competent Authority, it is not open to the Authority to exercise power under Rule 38(6), to set aside the sale. That would be against the spirit of legislative intent of giving finality to the auction sale process upon passing of an order of confirmation of sale. The writ appeal having been disposed of, in the guise of clarification, the Division Bench could not have passed any order at the instance of the debtor who had failed to challenge the decision of the Deputy Registrar. The writ appeals were filed by the auction purchaser and the Bank assailing the wrongful rejection of their Writ Petitions by the learned Single Judge. As the decision of the Deputy Registrar deserves to be set aside, the debtor cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This objection was enquired into and rejected on 22.3.2005. 4. The debtor submitted letters dated 6.4.2005 and 8.4.2005 requesting to stay the auction in view of the financial difficulties faced by him and paid only Rs. 25,000/- in the execution case filed against him. The auction sale was postponed pursuant to the request made by the debtor. The execution case was then transferred to the Assistant Registrar Co-operative Societies (hereinafter referred to as 'ARCS'), as per the revised Government notification. A fresh notice was issued on 9.5.2005 for auction sale to be held on 17.6.2005, as no further payment was made by the debtor till that date. 5. The debtor's brother filed a Writ Petition before the High Court of Karnataka at Bangalore being Writ Petition No. 15737 of 2005, challenging the sale proclamation. The High Court passed an interim order on condition of payment of 25% of the awarded amount within two weeks. In view of the interim order passed by the High Court, the auction sale scheduled on 17.6.2005 stood postponed. The Writ Petition filed by debtor's brother was, however, disposed of on 29.6.2005 with an observation to consider his objection. 6. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008 fixing the date for auction as 10.9.2008. The Respondent-Bank had obtained valuation report which estimated the value of the mortgage property at Rs. 44,80,000/-. The debtor was served with the notice of the auction sale. That notice was also published in the local Newspaper and by proclamation and tom tom. The debtor did not file any objection to the sale. The auction sale was accordingly, held on 10.9.2008, in which the Appellant-auction purchaser was the highest bidder for Rs. 51,50,000/-. The debtor then filed objections before the ARCS for setting aside the sale. That objection after due enquiry was rejected by the ARCS on 14.10.2008. That order has not been challenged. 12. Besides the objection filed before ARCS, the debtor also filed a writ petition before the High Court of Karnataka at Bangalore being Writ Petition No. 12901/2008 (CS-DAS), challenging the sale in favour of the auction purchaser. The High Court once again showed indulgence to the debtor by passing conditional interim order on 7.10.2008 directing the debtor to deposit Rs. 5,00,000/- within three weeks failing which the interim protection would cease to operate. The debtor deposited Rs. 5,00,000/- on 3.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso Recovery Officer's Court in case No. AR38/case/83/Executive/82/08-09 dated 02-03-2009 is hereby set-aside. The Petitioner should remit the below mentioned amount within four weeks from the date of this order- 1) Auction amount Rs. 51,50,000-00 2) Registration charges 4,84,465-00 3) Solatium account 2,57,500-00 4) Khatha expenses 25,000-00 5) Court expenses 20,000-00 6) Other expenses 10,000-00 --------------------- Total Rs. 59,46,965-00 ---------------------- He has to remit at 6% from 13-02-2009 until depositing the money at Mahalakshmi Co-operative Bank (Ltd.), Udupi. Under the said head the court charges and other charges shall born by the said bank and Respondent No. (4) equally (i.e. the person who purchased the property in auction). After remitting the balance amount, the bank shall transfer the same to the Respondent No. (4) within 3 days. This order pronounced in the open court today i.e. on 18-07-2009. Sd/- Deputy Registrar of Co-op. Societies Udupi District, Udupi. Even this order has not been challenged by the debtor and was allowed to attain finality. At the same time, the debtor did not deposit the amount as directed in the said order. 16. The auction purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (a) Amount deposited by the Appellant on 10.09.2008: Rs. 7,72,500/- interest @ 8% for 2 years 11 months Rs. 1,80,250/- (A) (b) Amount deposited by the Appellant on 25.10.2008: Rs. 43,77,500/- Interest 8% for 2 years 10 months Rs. 9,92,233/- (B) (c) Stamp duty for registration paid on 06.03.2009: Rs. 4,84,465/- interest @ 8% for 2 years 6 months Rs. 96,893/- (C) (A)+(B)+(C)=Rs. 12,69,376/- (D) (i) Amount in deposit with A.R.C.S. from 25.10.08: Rs. 20,82,616/- interest @ 4% for 2 yrs 10 months Rs. 2,36,030/- (E) (ii) Amount deposited by the Respondent No. 5 on 06/02/2010: Rs. 41,69,200/- interest @ 4% for 1 yrs 6 months Rs. 2,50,152/- (F) (iii) Amount in F.D. On orders of this Hon'ble Court: Rs. 62,51,816/- interest @ 8% for 3 months Rs. 1,25,036/- (G) (E)+(F)+(G)=Rs. 6,11,218/- (H) 12. He has calculated the interest deposited by the Appellant-purchaser for different periods as stated above. He has also shown the amount in deposit with the ARCS after deducting the amount that has to be paid to the Appellant-bank. 13. The Appellant-bank has also filed a calculation memo indicating the actual claim amount, the date of receipt of claim amount, number of days from the auction date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent amounts indicated above. He shall also be paid a solatium of Rs. 2,57,500/- apart from the interest at 12% per annum on all the amounts he has spent till the date of payment. So far as the bank is concerned, interest has to be paid for 160 days and Court expenses of Rs. 76,566/-. The amount was laying with the Recovery Officer for quite some time and it cannot be the entire fault of the Respondent-borrower. Therefore the bank shall get interest at 6% per annum on Rs. 30,67,384/- for 160 days apart from the Court expenses of Rs. 76,566/- spent by them. 17. With these observations, the appeals are disposed of directing the 5th Respondent to pay the amount as indicated above within a period of four weeks from the date of receipt of copy of this order, failing which the order of confirmation of sale shall stand. 18. In spite of the aforementioned order, the debtor did not pay the amount as directed by the High Court. The matter, accordingly, proceeded before the Assistant Registrar of Co-operative Societies (ARCS), who issued a detailed communication to the debtor on 21.12.2011. The ARCS considered the plea taken by the debtor that he was entitled for certain adjustments and was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Appellant in W.A. 2433/2010 alongwith interest at the rate specified therein. If any is found in excess he should have given it to 5th Respondent. In any event, if he had any doubt with regard to the above said aspect he should have approached this Court through the Learned Government Advocate by filing an application seeking clarification. Instead, he has taken the responsibility of trying to interpret the same in the manner known to him and also contrary to the intent of this Court. In any event, this Court feel there is no justification to keep this litigation pending forever. Therefore, to put quietus to this litigation it is hereby directed that 3rd Respondent ARCS shall immediately disburse the entire amount that is required to be paid to the auction purchaser and also to the bank within one week from today. The excess of amount that remains after disbursing the amount shall be retained by him until further orders of this Court. Further, after receiving the amount the bank and the auction purchaser shall file memo of calculation to seek additional interest from the date of the judgment till actual date of receipt of money for which they are entitled to. Whether the confusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be implemented within ten days from the date of receipt of a copy of this order. The Division Bench directed the ARCS to act upon to the clarificatory order dated 8.6.2012 and 29.6.2012 respectively and to implement the same within 10 days. 20. The writ petition filed by the debtor (against the communication dated 21.12.2011 of the ARCS) was allowed by the learned Single Judge vide order dated 7.9.2012, which reads thus: ORDER An extent of 32 cents in Sy. No. 260/7 of Kodavoor village in Udupi Taluk belonging to the Petitioner was brought to sale to recover the outstanding amount due to Respondent No. 4 financial institution. The said property was put to auction on 10.9.2008 for Rs. 51,50,000/-. The 3rd Respondent was the successful bidder and he deposited the amount also. On appeal, the Deputy Registrar of Co-operative Societies set aside the order dated 2.3.2009 by which the auction sale was confirmed and directed the Petitioner to deposit Rs. 59,46,965/- within four weeks. The 3rd Respondent-auction purchaser as well as the 4th Respondent Bank were before this Court questioning the said order. This Court dismissed the writ petitions, against which W.A. Nos. 1006 and 2433/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.04.2007. The debtor did not pay the awarded amount in spite of repeated opportunity given to him on every occasion. Thus, for effectuating the Award and for recovery of the outstanding dues from the debtor, his mortgage property was required to be auctioned. That auction sale was finally held on 10th August 2008. The Appellant-auction purchaser turned out to be the highest bidder. The debtor unsuccessfully attempted to apply for setting aside the auction sale. He also challenged the sale by way of Writ Petition No. 12901/2008. Even the Writ Petition was dismissed on 3rd December 2008. In the said writ petition, the debtor had also prayed for setting aside the sale. That prayer was also rejected. Indeed, the debtor resorted to remedy of writ appeal being Writ Appeal No. 1914/2009. That was disposed of by recording an incorrect statement of the debtor that his appeal against the Award was still pending. As a matter of fact, the appeal preferred by the debtor before the Karnataka Appellate Tribunal being Appeal No. 419/2004, was already dismissed on 30th April, 2007. As a result of which, the Award passed against him had become final. 23. Be that as it may, it is common ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- on 6th February 2010 and Rs. 20,19,925/- on 22nd September 2011. That was not in compliance with the order dated 18th July 2009. 26. The fact that Writ Petitions were filed by the auction purchaser and the Bank against the order of Deputy Registrar (CS) dated 18th July 2009, that could not extricate the debtor from complying with the order of Deputy Registrar (CS) which he allowed to attain finality. As a matter of fact, the said order was passed on an appeal preferred by the debtor himself and thus he was bound by the same. 27. The debtor cannot be heard to claim benefit of the proceedings in the form of Writ Petitions followed by Writ Appeals filed by the auction purchaser and the Bank. For, it is noticed that the Division Bench in its order dated 24th August 2011 determined the liability of the debtor to pay Rs. 59,46,965/- along with solatium and interest thereon. At least in terms of that decision, the debtor ought to have paid the entire amount. However, there was still a shortfall of Rs. 18,75,791.40. The debtor, instead, represented before the ARCS that he was not liable to pay any further amount in excess of the amount already deposited by him until 22nd September 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Immoveable property shall not be sold in execution of a decree unless such property has been previously attached: Provided that where the decree has been obtained on the basis of a mortgage of such property it shall not be necessary to attach it. (2) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (3) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (4) (a) Where immoveable property has been sold, any person either owning such property or holding an interest therein by virtue of a title acquired before such sale may apply to have the sale set aside on his depositing with the Recovery Officer.- (i) For payment to the purchaser a sum equal to 5 per cent of the purchase money; and (ii) for payment to the decree-holder the amount of arrears specified in the proclamation of sale as that for the recovery of which the sale was ordered together with interest thereon and the expenses of attachment, if any, and sale and other costs due in respect of such amount, less amount which may since the date of such proclamation have been received by the decree-holder. (b) If such deposit and application are made within 30 days from the date of sale, the Recovery Officer shall pass an order setting aside the sale and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that if he shall have reason to think that the sale ought to be set aside notwithstanding that no such application has been made or on grounds other than those alleged in any application which has been made and rejected, he may, after recording his reasons in writing, set aside the sale; (b) Whenever the sale of any immoveable property is not confirmed or is set aside, the deposit or the purchase money, as the case may be, shall be returned to the purchaser. (7) On the confirmation of a sale under this rule, the Recovery Officer shall grant a certificate of sale bearing his seal and signature to the purchaser, and such certificate shall state the property sold and the name of the purchaser, and it shall be conclusive evidence of the fact of the sale to such purchaser. (8) the land purchased by Government in satisfaction of any decree prior to commencement of the Karnataka Co-operative Societies (V amendment) Rules 1977 shall be reconveyed to the person who own the property or held an interest therein by virtue of a title acquired before the sale if he makes application for such reconveyance and deposits with the recovery officer with in a period of ninety days from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for setting aside the sale in terms of Rule 38(4) of the Rules at all. Instead, he preferred an appeal Under Section 106 of the Act before the Assistant Registrar after the order of confirmation of sale was passed by ARCS in favour of the auction purchaser. Such appeal Under Section 106 of the Act was not maintainable. The decision of confirmation of sale is not ascribable to any of the provisions expressly referred to in Section 106 of the Act, in respect of which remedy of appeal is provided. Further, the order passed by the Deputy Registrar dated 18th July 2009 in favour of the debtor to set aside the auction sale on conditions specified therein, in our view, is not ascribable even to an order passed under Rule 38(6). That discretion has to be exercised only by the Recovery Officer and more importantly before the order of confirmation of auction sale. 35. The counsel for the debtor, however, placed reliance on two decisions of this Court in J. Rajiv Subramaniyan and Anr. v. Pandiyas and Ors. (2014) 5 SCC 651 and Vasu P. Shetty v. Hotel Vandana Palace and Ors. (2014) 5 SCC 660. Emphasis was placed on paragraphs 18 and 29 of the decision in Subramaniyan's case (supra). Fir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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