wp5952-11.sxw 1 spb IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 5952 OF 2011 Anil Gulabrao Deshmukh ... Petitioner. V/s. Divisional Joint Registrar, Co-op. Societies, Kolhapur Division, Kolhapur & Ors. ... Respondents. --- Mr. Ajit Kenjale for the Petitioner. Ms. P.S. Cardozo, AGP for the Respondent Nos. 1 and 2. Mr. Dhiraj Ghadge for Respondent Nos. 3 and 4. Mr. Datta Pawar for Respondent No.5. --- CORAM:- G.S. GODBOLE, J. DATED :- 22nd DECEMBER, 2011. P.C. : 1 On 1st December, 2011 following order was passed. “1. Heard Mr. Ajit Kenjale, Advocate for the Petitioner, Mr. Rayrikar, AGP for Respondent Nos. 1 and 2 and Mr. Pawar, Advocate for Respondent No. 5. 2. Perused the earlier orders dated 28/7/2011 and 26/8/2011. It is not in dispute that a recovery certificate under section 101 of the M.C.S. Act, 1960 has been issued in favour of the Respondent No. 3 by the Assistant Registrar on 17/8/2005 for a sum of Rs. 1,31,820/- plus interest at 17 wp5952-11.sxw 2 per cent per annum on Rs. 1,29,920/- w.e.f. 1/6/2005. In execution of this recovery certificate, the property of the Petitioner was auctioned on 22/6/2009 wherein Respondent No. 5 emerged as the auction purchaser having bid Rs. 6,50,000/-. He deposited Rs. 3 Lakhs on the same day. However, admittedly, the balance amount of Rs. 3.5 Lakhs was not deposited within 15 days from 22/6/2009 as is mandatory under Rule 107(11)(h) of the M.C.S. Rules, 1961. The said provision which is akin to Order 21 Rules 84 and 85 has been consistently held to be mandatory by the Supreme court in the case of Shilpa Shares and Securities v/s. National Cooperative Bank Ltd. AIR 2007 SC 1874. In fact, long ago in the case of Manilal Mohanlal Shah and Others v/s. Sardar Sayed Ahmed Sayed Mahmad and anr. AIR 1954 SC 349, it has been held that in such circumstance, there is no sale at all if the balance purchase money is not paid within 15 days. It is further held that it is not a mere irregularity and non payment of the balance amount within the time rendered the sale proceedings a complete nullity and not a mere irregularity. 3. Rule 107(11)(i) however, grants a discretion to the recovery Officer to forfeit or not to forfeit the amount deposited by the auction purchaser after deducting the sale expenses. Mr. Ajit Kenjale learned Advocate for the Petitioner on instructions from the Petitioner who is present in court states that the Petitioner is ready to accept the wp5952-11.sxw 3 recovery certificate and deposit the entire amount under the Recovery Certificate after adjusting the sum of Rs. 1,30,000/- already deposited in this Court on or before 22/12/2011. The statement is accepted. 4. In this view of the matter and in the light of the settled position of law, issue notice for final disposal peremptorily returnable 22/12/2011 to be kept first on board. Service of notice on Respondent Nos. 6a and 7 is waived. Mr. Pawar waives service on behalf of the Respondent No. 5 and the learned AGP waives service on behalf of the Respondent Nos. 1 and 2. Hamdast allowed. 5. In addition to service through Court, Advocate of the Petitioner/s is also permitted to send private notice to the Respondent Nos. 3 and 4 by RPAD or Speed Post AD alongwith copy of this order and file Affidavit of Service only if acknowledgment is received or postal envelope is returned with remark “refused”. 6. Even if the Respondent Nos. 3 and 4 do not appear before this Court after service of private notice, the Petition will be disposed off on 22/12/2011. Interim order passed earlier to operate until further orders. All the parties to act on the authenticated copies of this order. (GIRISH GODBOLE, J)” wp5952-11.sxw 4 2 Accordingly, Respondent Nos. 3 and 4 are served and are appearing through Advocate -Mr. Dhiraj Ghadge. 3 Rule. Rule made returnable forthwith. Learned AGP waives service on behalf of Respondent Nos. 1 and 2, Mr. Ghadge waives service on behalf of Respondent Nos. 3 and 4 and Mr. Datta Pawar waives service on behalf of Respondent No.5. Service on Respondent Nos. 6A and 7 is dispensed with. 4 Mr. Pawar, Advocate appearing for the Respondent No.5 has brought to my notice the letter dated 22nd June, 2009 written by the Special Recovery and Sale Officer of Maratha Sahakari Credit Society Ltd., Satara which states that the balance amount of Rs. 3,50,000/- and the stamp duty and registration charges can be deposited by the auction purchaser till 21st July, 2009. Pursuant to the earlier order dated 01st December, 2011, the Petitioner has deposited a total sum of Rs. 2,77,300/-. It is not disputed by Mr. Ghadge that this is the total amount recoverable from the Petitioner under the Recovery Certificate dated wp5952-11.sxw 5 17.08.2005 in Case No. 568/2005. Thus as on today, the entire amount due and payable under the Recovery Certificate has been deposited by the Petitioner. 5 It is an admitted position that though auction sale was conducted and confirmed on 22.06.2009 and though a sum of Rs.3,00,000/- was deposited on that date, the balance amount of Rs. 3,50,000/- was not deposited within 15 days as contemplated by Rule 107 (11)(h) of the MCS Rules, 1961. The auction purchaser deposited the said amount on 21.07.2009 relying on the letter dated 22nd June, 2009 written by the Special Recovery and Sale Officer of Maratha Co-operative Credit Society Ltd.. In view of this it is difficult to blame the auction purchaser even though entire sale is a nullity as repeatedly held by the Supreme Court. 6 Clause (i) of Rule 107 (11) gives a discretion to the Recovery Officer whether to forfeit the entire amount deposited by the defaulting auction purchaser or to refund that amount after defraying the expenses of sale. In the facts and circumstances of the present case, as auction purchaser was apparently misled by the letter dated 22.06.2009, it is wp5952-11.sxw 6 directed that the Recovery Officer will only recover the expenses of sale from the amount deposited by the auction purchaser and the balance amount shall be refunded to the auction purchaser by the Society. 7 In so far as the amounts deposited by the Petitioner in this court are concerned, the Respondent Society will be permitted to withdraw the said amount unconditionally and give credit to the Petitioner thereby discharging the Petitioner from his obligation to satisfy the Recovery Certificate. 8 All other contentions of the Petitioner and the Respondent No.3 Society in respect of any other claim against each other are kept open to be agitated in appropriate proceedings in accordance with law. 9 Rule is partly made absolute in the aforesaid terms by declaring that the auction in favour of the Respondent No.5 is a nullity and by holding that the Recovery Certificate is duly satisfied. [G. S. GODBOLE, J.]