P. M. ABUBAKAR versus STATE OF KARNATAKA AND ORS.
[2016] 11 S.C.R. 103, Supreme Court of India, 2016
Outcome: Disposed off
Segment: Ratio
[2016) 11 S.C.R. I 03 
P. M. ABUBAKAR 
v. 
STATE OF KARNATAKA AND ORS. 
(Civil Appeal Nos.10894-10895 of2016) 
NOVEMBER 17, 2016 
(ANIL R. DAVE AND A. M. KHANWILKAR, JJ.) 
Auction: 
Karnataka Cooperative Societies Act, 1959 - ss.89A, 106 -
Auction sale of mortgage property - Debtor committed default in 
repayment of loan to Bank, recovery proceedings were initiated by 
the Bank - Award passed for the recovery of money - Debtor failed 
to pay the awarded amount in spite of repeated opportunities -
Mortgaged property auctioned - Appellant was the highest 
bidder - Competent authority confirmed auciion sale in favour of 
appellant - Sale certificate issued to appellant - Debtor preferred 
appeal before the Deputy Registrar (CS) uls. 106 - Deputy Registrar 
(CS) held that sale was in accordance with Rules hut it was a case 
of under valuation of the property and on that ground set aside the 
confirmation of sale 011 the condition that the debtor shall deposit 
stipulated amount with interest - Debtor again failed to comply with 
the order - Appellant-auction purchaser filed writ petition against 
the order of Deputy Registrar (CS), which was dismissed by High 
Court - On appeal, held: Order of confirmation of sale is ascribable 
to s.89A of the Act rlw. r.38 of the Rules ,... No remedy of appeal 
against that decision is provided - s.106 of the Act does not provide 
for an appeal against the order confirming an auction sale, passed 
uls.89A r/w. r.38 - s.89A of the Act rlw. r.38
of the Rules provide for 
special dispensation - Order passed by the Deputy Registrar (CS) 
in appeal was without jurisdiction - Therefore, High Court committed 
error in dismissing the writ petition filed by appellant-auction 
purchaser - Order passed by Deputy Registrar (CS) setting aside 
auction sale in favour of appellant-auction purchaser and order of 
High Court confirming it, accordingly set aside - Karnataka 
Cooperative Societies Rules - r. 38. 
Allowing the appeals by the auction purchaser and 
dismissing the appeals by the debtor, the Court held 
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[2016] II S.C.R. 
HELD: 1. The debtor did not prefer application for setting 
aside the sale, inconformity with the remedy provided in that 
behalf in terms of Section 89A of the Karnataka Cooperative 
Societies Act, 1959 read with Rule 38 of the Karuataka 
Cooperative Societies Rules. That remedy could be availed by 
the debtor only after depositing the awarded amount together 
with interest thereon with the Recovery Officer, in terms of Rule 
38(4)(a) of the Rules. The application as filed by the debtor was 
dismissed by the ARCS. Resultantly, the Competent Authority 
proceeded to confirm the auction sale, followed by grant of a 
certificate of sale and execution of a Sale Deed in the prescribed 
I;orm. The sale of the subject property thus, became final. [Para 
23] 1120-C-E) 
2. The debtor, however, was ill advised to prefer an appeal 
before the Deputy Registrar (CS) of Cooperative Societies, 
against the decision of the Competent Authority confirming the 
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auction sale. 
For, remedy of appeal before that Authority 
could be availed only in terms of Section 106 of the Act, against 
an order passed by the Authority (Registrar) in exercise of 
powers ascribable to the provisions referred to therein. The 
order of confirmation of sale is ascribable to Section 89A of 
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Karnataka Cooperative Societies Act, 1959 Act read with Rule 
38 of Karnataka Cooperative Societies Rules. No remedy of 
appeal against that decision is provided.
Section 106 of the Act 
does not provide for an appeal against the order confirming an 
auction sale, passed under Section 89A read with Rule 38. 
Section 89A of the Act read with Rule 38 of the Rules provide for 
a special dispensation. Thus understood, the order passed by 
the Deputy Registrar (CS) on the appeal preferred by the debtor, 
is without jurisdiction. [Para 24) [120-E-H] 
3. The debtor unsuccessfully challenged the auction sale 
and prayed for setting aside the same by filing writ petitions. That 
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relief has been rejected. A formal application for setting aside 
the sale filed by the debtor was also rejected by the ARCS. The 
appeal preferred by the debtor before the Deputy Registrar (CS) 
was against the decision of the Competent Authority confirming 
the auction sale. It was not maintainable under Section 106 of the 
Act. The Deputy Registrar (CS) had no jurisdiction. Further, once 
H
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
the auction sale is confii-med 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. It is only the Authority referred 
to in Rule 38, who could have set aside the sale by recording 
reasons in writing in exercise of powers under Rule 38 of the 
Rules, albeit before passing an order confirming the auction sale. 
[Paras 29, 30, 31] [122-B-E] 
4. In the present case, the debtor did not choose to file an 
application 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 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 
in favour of the debtor to set aside the auction sale on conditiOns 
specified therein, 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.
[Para 34) [126-C-E] 
5~ The High Court committed manifest error in dismissing 
the Writ Petitions filed by the appellant - auction purchaser 
challenging the decision of the Deputy Registrar (CS). The High 
Court ought to have allowed the Writ Petition as the Deputy 
Registrar had no jurisdiction to entertain appeal against the order 
of confirmation of sale issued under Section 89A read with Rule 
38 of the Rules; and also because, admittedly, the debtor failed 
to pay the awarded amount in spite of repeated opportunities 
given to him from time to time. Moreover, the debtor cannot 
succeed in the Writ Petition filed by the auction purchaser and 
the Bank against the decision of the Deputy Registrar and get 
higher or further relief in such proceedings. Thus, the Division 
Bench having finally disposed of the writ appeal ought not to have 
entertained the application preferred by the debtor in the guise 
of clarification and to pass any order thereon - which would enure 
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SUPREME COURT REPORTS 
[2016] 11 S.C.R. 
A to the benefit of debtor who is in default, having become functus 
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officio. [Para 36) [127-C-F] 
Annapurna v. Mallikarjun & Anr. (2014) 6 SCC 397 : 
2014 (7) seR 299- referred to. 
J.Rajiv Subramaniyan & Anr. v. Pandiyas & Ors. 
(2014) 5 sec 651: 2014 (3) SeR II40; Vasu P. Shetty 
v. Hotel Vandana Palace & Ors. (2014) 5 sec 660 : 
2014 (9) seR 38 - held inapplicable 
c 2014 (7) SCR 299 
2014 (3) SeR 1140 
Case Law Reference 
referred to 
held inapplicable 
Para34 
Para JS 
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2014 (9) SCR 38 
held inapplicable 
Para 35 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 10894-
10895 of2016. 
From the Judgment and Order dated 08.06.2012 and 29.06.2012 
of the High Court ofKarnataka, at Bangalore in Writ Appeal No. 1006/ 
2010 C/W Writ Appeal No. 2433 of2010(CS) 
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C. A. NOS. I 0896-10897 of 2016 and 
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C. A. NOS. 10898-10899 of 2016. 
R. S. Hegde, Ms. Farhat Jahan Rehmani, Shanti Prakash (For 
Rajeev Singh), Advs., for the Appellant. 
Haren Raval, Sr. Adv., Nataraj Balla!, Rajesh Mahale, Krutin R. 
Joshi, Girish Ananthamurthy (For Mrs. Vaijayanthi Girish), 
V. N. Raghupathy, Ms. Shomila Bakshi, Advs. for the Respondents. 
The Judgment of the Court.was delivered by 
A. M. KHANWILKAR, J. 1. Delay condoned. 
2. Leave granted. 
3. These cross appeals have been filed by the debtor (Keshva 
N. Kotian) and auction-purchaser (P.M. Abubakar). As the debtor 
committed default in repayment ofloan to the Bank (Mahalakshmi Co-
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
[A. M. KHANWILKAR, J.] 
operative Bank Limited), recovery proceedings were initiated by the 
Bank. That culminated with an award passed by the Joint Registrar Co-
operative Societies, Mysore dated 02.01.2004 against the debtor for 
recovery of Rs. 13, 65,899.70 with interest at 19% p.a. As the debtor 
failed to pay the amount in terms of the award, execution petition was 
filed. The debtor, however, filed an appeal being Appeal No. 419 of 
2004 before the Karnataka Appellate Tribunal, Bangalore. On 
21.06.2004, the Tribunal passed a conditional order of stay requiring the 
debtor to deposit 40% of the awarded amount within eight weeks, failing 
which the stay would stand vacated. The debtor failed to deposit that 
amount. Therefore, the bank after obtaining valuation report relating to 
the mortgage property, issued notice on 2.2.2005 in Form No. 6. In spite 
of notice, no payment was made by the debtor. As a result, the Bank 
issued notice of attachment in Form No. 7 on 25.02.2005. The notice of 
attachment was followed by a notice ofauction issued on 3.3.2005, fixing 
the auction date as 11.04.2005. On 7.3.2005, the debtor's brother (Shri 
Anand Kotian) filed an objection to the said proceedings. According to 
him, the property was a joint family property. 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 the meantime auction sale was proposed to be held on 
18.8.2005, but in view of the aforementioned High Court order the auction 
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[2016] 11 S.C.R. 
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sale was postponed. The objection filed by the debtor's brother was 
considered on eight dates. He, however, filed a memo before ARCS on 
21.12.2006 for withdrawal of his objection. The said objection was finally 
dismissed on I 61h July, 2007. 
7. On 30.4.2007, appeal preferred by the debtor challenging the 
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award dated 2.1.2004 was dismissed by the KarnatakaAppellate Tribunal, 
Bangalore. That decision has not been challenged. 
8. Once again a notice for auction sale of the mortgage property 
was issued on 18.7.2007, fixing the date of auction on 28.08.2007. The 
debtor filed a Writ Petition No. 13204 of2007 (CS-DAS), challenging 
c the sale proclamation. The High Court by order 27.08.2007 granted 
interim protection to the debtor on condition of depositing 40% of the 
awarded amount within two weeks, failing which the protection would 
stand vacated. The debtor had deposited Rs.1,00,000/- on 21.8.2007. 
He deposited further amount of Rs. 50,000/- on 27.8.2007 and assured 
to pay Rs. 50,000/- on 30.8.2007. On his request the auction sale fixed 
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on 28.8.2007 was postponed. 
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9. As the debtor failed to pay the balance awarded amount as 
directed by the High Court, again a notice was issued on 9 .10.2007 
fixing the auction sale on 12.11.2007. The debtor filed memo before 
the High Court in Writ Petition No. 13204 of2007 (CS-DAS), on the 
basis of which the said Writ Petition was dismissed as withdrawn having
become infructuous. 
· I 0. As the balance awarded amount was not forthcoming, a fresh 
notice for auction was issued on 30.11.2007, fixing the date of auction 
sale as 27 .2.2008. The debtor then filed a fresh Writ Petition No. 3098 
of2008 (CS-DAS) challenging the auction sale. The High Court vide 
order dated 25.2.2008 showed indulgence to him and stayed the auction 
sale scheduled for 27.2.2008 subject to the debtor depositing Rs. 
I 0,00,000/- (Rs. Ten Lakhs only) within six weeks. It was made clear 
that ifthe debtor failed to pay the amount as directed, the protection as 
given shall stand vacated and then it would be open to the bank to proceed 
with the sale of mortgage property. 
11. The debtor once again failed to pay the amount as directed 
by the High Court vide order dated 25.2.2008. As a result, a fresh 
notice forauction sale was issued on 28. 7 .2008 fixing the date for auction 
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as 10.9.2008. The Respondent-Bank had obtained valuation report which
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
[A. M. KHANWILKAR, J.] 
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 I 0.9.2008, 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 cha!lenged. 
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. I 0.2008.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 3.11.2008. 
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13. Significantly, the Writ Petitions filed by the debtor being Writ -
Petition No. 3098/2008 and Writ Petition No. 12901/2008 came to be 
dismissed by the High Court on 3.12.2008. By these Writ Petitions, the 
debtor had challenged the auction sale with a prayer to set aside the
auction in favour of the auction purchaser. With the dismissal of the said - E 
Writ Petitions, the challenge to the auction sale of the subject property 
on l 0.09.2008 became final. Indeed, the debtor filed Writ Appeal No. 
1914/2009 against the rejection of his writ petitions. That was disposed 
of on the basis of statement made by the debtor that writ appeal filed by 
him before the Karnataka Appellate Tribunal against the award dated 
2.1.2004 was pending. That statement was incorrect as the said appeal 
(Appeal No. 419/2004) was already dismissed on 30.4.2007. Because 
of the said misleading statement made by the debtor, the High Court 
vide order dated 15.1.2009, whilst disposing the writ appeal observed 
that it would be in the fitness of things for the Tribunal to take up the 
appeal on merits expeditiously preferably within six weeks. It also 
observed that the objections filed by the debtor against the auction sale 
be considered in accordance with law. 
14. The Sales Officer on 17.2.2009, after due consideration of 
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the matter recommended confirmation of the sale in favour of the auction 
purchaser. On the basis of the said recommendation, ARCS passed a 
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[2016] I l S.C.R. 
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detailed order on 2.3.2009, confirming the sa.le in favour of the auction 
purchaser. Thereafter, Sale Deed in Form No. 10 was executed in 
favour of the auction purchaser on 5.3.2009; and sale certificate was 
also issued in his favour. 
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15. The debtor, however, chose to file appeal before the Deputy 
Registrar of Co-operative Societies, Udupi District (DRCS) against the 
order ofconfirmation of sale dated 02.03 .2009, being appeal No. 07 /08-
09. The DRCS entertained the said appeal and by his order dated 
18. 7 .2009 held that the sale was in accordance with the Rules but it was 
a case of under valuation of the property. On that ground, the confinnation 
of sale was set aside on condition that the debtor shall deposit Rs. 
59,46,965/- with interest at 6% p.a. from 13.2.2009 till payment. The 
operative order passed by Deputy Registrar Co-operative Societies reads 
thus: 
"ORDER 
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The confirmation order passed by the Asst. Registrar 
Co-operative Societies also Recovery Officers 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 
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within four weeks from the date of this order-
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1) Auction amount 
2) Registration charf(es 
3) Solatium account 
4) Khatha expenses 
5) Court expenses 
6) Other expenses 
Total 
Rs. 
Rs. 51,50,000-00 
4,84,465-00 
2,57,500-00 
25,000-00 
20,000-00 
10,000-00 
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 
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(i.e. the person who purchased the property in auction). After
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
111 
[A. M. KHANWILKAR, J.] 
remitting the balance amount, the bank shall transfer the 
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same to the respondent No. (4) within 3 days. 
This order pronounced in the open court today i.e. 011 
J 8~07-2009. 
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 purchaser and the bank being aggrieved by the 
order passed by the DRCS, preferred Writ Petition No.23690/2009 and 
23196/2009 (CS-DAS) respectively. These writ petitions were heard by 
the learned Single Judge. He opined that considering the wide difference 
between the high value of the property and the awarded amount, there 
was no necessity to sell the entire property. In that, the property consisted 
of a building and also vacant property. The learned Single Judge was of 
the opinion that the reason recorded by the Appellate Authority (DRCS) 
was just and proper and did not warrant any interference in exercise of 
writ jurisdiction. As a result, the writ petitions filed by the auction 
purchaser and the Bank were dismissed by a common judgment dated 
11.01.2010. 
17. The auction purchaser and the Bank preferred separate Writ 
appeals, being W.A. No. 1006/2010 (CS-DAS) and W.A. No. 2433/ 
2010 (CS-DAS) respectively. The Division Bench of the High Court 
vide its
common judgment dated 24.8.2011 disposed of both the appeals. 
The Division Bench noted that the Appropriate Authority concerned was 
competent to set aside tl}e sale even if there was no application for 
setting aside the sale or factually such application has already been 
rejected. It noted that from the orders of DRCS and the learned Single 
Judge, it was evident that the debtor did not fulfill.his obligation in spite 
of repeated opportunity given to him to pay the awarded amount. Even 
after noting this fact, the Division Bench opined that as the property in 
question was under valued at the time of auction sale, no fault could be 
found with the discretion exercised to set aside the sale under proviso to 
Sub rule 6(a) of Rule 38. On that finding, the Division Bench rejected 
the plea of the debtor and the Bank that without a pre deposit of the 
awarded amount as required under Rule 38 and that too within the time 
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f20 I 61 I I S.C.R. 
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prescribed under the said Rule, the Appropriate Authority could not have 
set aside the sale. The Division Bench then adverted to the memo of 
calculation filed by the debtor and proceeded to pass order, which in its 
opinion was just and proper so as to adjust equities between the parties. 
The relevant extract of the impugned judgment, reads thus: 
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'"11. A memo of calculation filed by the advocate for 
Re~pondent No. 5 on 11. 8.2011 indicating the different 
amounts deposited by the appellant is as under: 
Memo of Clllcul"tion 
(a) Amount deposited by the 
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Appellant on 10.09.2008:-Rs. 7, 72,5001- interest @ 
8% for 2 years 11 111onths 
Rs. 1,80,2501- (A) 
(b) Amount deposited by the 
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Appellant on 25. 10.2008:-Rs.43, 77,5001- Interest 
8% for 2 years 10 months 
Rs. 9,92,2331- (B) 
(c) Sta111p duty for registration 
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paid on 06.03.2009:-
Rs. 4,84,4651- imerest @ 
8% for 2 years 6 months 
Rs. 96,8931- (C) 
(A)+(B)+(C) =Rs.12, 69, 3 761-
(D) 
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(i) 
A111ount in deposit with 
A.R.C.S. from 25.10.08:-Rs. 20,82,6161- interest@ 
4% for 2 yrs 10 months 
Rs. 2,36,0301- (E) 
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(ii) Amount deposited by the 
Respondent No.5 on 
0610212010:-
Rs. 41,69,200/- imerest @ 
4% for 1 yrs 6 months 
Rs. 2,50,1521- (F) 
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P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
113 
[A. M. KHANWILKAR, J.] 
(iii) Amount in F.D. On orders 
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of this Hon 'ble Court:-
Rs. 62,51,816/- interest@ 
8% for 3 months 
Rs. 1,25,0361- (G) 
(E)+(F)+(GJ=Rs. 6,11,2181- (H) 
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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. 
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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 till the 
amount received on 13.3.2009, rate of interest and the actual 
ainount of interest payable apart from the expenses incurred 
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by them after 10.9.2008for various litigations. This amount 
. totally comes to Rs. 3,05,1491- as indicated below: 
1. 
Date of Receipt of Claim amount 
13-3-2009 
2. Claim amount 
Rs. 30,67,384.00 
3. Number qf days from auction date 
10-9-2008 to amount received 
date 13-3-2009 
160 days 
4. Rate of interest 
17% 
5. /merest receivable for 160 days 
6. Court expenses spent qfter 
10-9-2008 for various disputed 
Total 
Rs. 2,28,583.00 
Rs. 76,566.00 
Rs. 3,05,149.00 
14. So far as the auction purchaser is concerned, we note 
that he has made the following payments: 
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SUPREME COURT REPORTS 
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10.9.2008 
Rs. 
7,72,5001-
2. 
25.10.2008 
Rs. 43, 77,5001-
3. 
Stamp duty for registration 
Paid on 6.3.2009 
Rs. 4,84,4651-
15. As per the orders of the DRCS, he has to receive Rs. 
59,46,9651- includi11g solatium with interest at 6% per an11um 
from 13.2.209. Till date so jar as auction purchaser is 
concerned not even a single pie is paid back to him. In case, 
the auctio11 purchaser were to have the confirmation of sale 
in his favour, this calculation would not be of any releva11ce. 
The fact remains the concerned authority has exercised the 
discretion and there is prima facie material to indicate there 
was under-valuation of the property as well. But this does 
not mean the auction purchaser who has parted with different 
amount by selling his own property should be put to financial 
loss apart from hardship. So jar as the ba11k is concerned, 
the amou11t was lying with the Recovery Officer and only on 
13.3.2009 they got the claim amount. However, this claim 
amount includes interest only upto the date of auctio11 and 
not the subsequent interest payable. If the respondent -
borrower intends to retain his property for the reasons best 
known to him, either for emotional attachment or other 
reason, he has to compensate the purchaser for causing the 
loss to him. The amount of Rs. 59,46,9651- i11cludes solatium 
of Rs. 2,57,5001-, but it does not spell out the interest he 
would have got on
this amount or the profit he could have 
got on the property which he sold in order to pay the auction 
price. 
16. In order to meet the ends of justice, it would be just 
and proper to order payment of interest at 12% per annum 
for the date of deposit made by him on different amounts 
indicated above. He shall also be paid a solatium of Rs. 
2,57,5001- 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. 76,5661-. The amount was laying 
with the Recovery Officer for quite some time and it cannot 
be the entire fault of the respondent - borrower. Therefore
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
[A. M. KHANWILKAR, J.] 
the bank shall get interest at 6% per annum on Rs. 30,67,3841-
for 160 days apart from the Court expenses of Rs. 76,5661-
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 not required to pay any 
further amount. The ARCS did not accept the said stand taken by the 
debtor and was of the opinion that the amount as directed by the Division 
Bench has not been paid. The ARCS in his communication dated 
21.12.2011 has noted that a sum of Rs. 80,64,916/- was payable by the 
debtor out of which he had remitted only a sum of Rs. 41,69,200/- on 
6.2.2010 and Rs. 20, 19,925/-on 22.9.2011 totaling Rs. 61,89, 125/-. There 
was still shortfall of Rs. 18, 75, 791.40 payable by the debtor. The 
communication of the ARCS dated 21.12.2011 was challenged by the 
debtor, by way of Writ Petition No. 48814/201 l(CS-DAS)
filed on 
29.12.2011 before the High Court of Karnataka at Bangalore. 
19. When the said Writ Petition No. 48814/2011 (CS-DAS) was 
pending, the debtor filed an application being IA No. 1/2012 in disposed 
of writ appeal No. 1006/2010 (CS-DAS) and writ appeal No. 2433/ 
2010 (CS-DAS), for clarification of the order dated 24.8.2011. On 
8.6.2012, the Division Bench passed the following order on the said IA 
No. 1/2012, which reads thus: 
"ORDER ON I.A. No. 112012 
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Heard the learned counsel for the applicant, who is J'f• 
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respondent in WA. No. 243312010 (CS) on I.A. No. 112012 
filed seeking clarification of judgment dated 24.8.2011. 
It is seen that by judgment dated 24.8.2011 this Court allowed 
WA. Nos. 100612010 clw 243312010 with certain directions. 
As could be seen, in paragraph 16 of the judgment the intent 
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of this Court is very clear, that is, the auction purchaser 
appellant in W.A. No. 100612010 should get back his money 
with solatium, interest damages. etc. as specified therein and 
the same was required to be paid by 3"' respondent. No 
mode for payment was specified in the said judgment. 
However, it is seen that ARCS, 3"' respondent in the app_eals 
has taken his own time in trying to interpret the said order 
by his order which was initially passed on 21.11.2011 and 
thereafter corrected as 21.12.2011 to say that entire amount 
should have been deposited by the 5
1h respondent to comply 
with the judgment of this Court which we are not agreeable. 
With the available money, the 3"' respondent -ARCS should 
have first cleared off the amount to the auction purchaser 
with interest, solatium, damages and whatever he is entitled. 
to fro111 out of the amount that was available with 3n1 
respondent. Thereafter, 3"' responde111 should have cleared 
the money due to the bank, appellant in W.A. 243312010 
alongwith interest at the rate specified therein. If any is 
found in excess he should have given it to 51h 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 t~ keep this litigation 
pending forever. Therefore, to put quietus to this litigation it 
is hereby directed that 3"' respondent ARCS shall i111111ediately 
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 re111ains after 
disbursing the amount shall be retained by him u111il further 
orders of this Court. 
Further, after receiving the amount the bank and the 
auction purchaser shall file me1110 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 confusion is at the end of 5
111 responde111 qr at
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
[A. M. KHANWILKAR, J.] 
the instance of 3"' respondent-ARCS should not be the reason 
to deprive the fruits oi the judgment to the auction purchaser 
and the bank. Therefore, they are called upon to receive 
· the entire amount pursuant to the judgment of this Court 
and thereafter file memo to this Court regarding the extent 
of interest they are entitled to for the different period, which 
will be considered by this Court at the next date of hearing. 
Call this matter on 29.6.2012". 
The Division Bench thereafter passed the following order on 29.6.2012, 
which reads thus: 
"These two writ appeals were disposed of by common judgment 
on 24.8.2011 wherein certain directions were given for re-
payment of the amount deposited by the auction purchaser 
and also the amount due to the Bank. Though sufficient 
amount was available with the 3rd respondent-ARCS, he tried 
to interpret the order of this Court differently and caused 
some delay in making payment to the parties. Though strictly 
there is no mistake on the part of the 5th respondelll-original 
owner in making available the requisite fund in terms of the 
order for refund of money due to the auction purchaser and 
to clear the dues to the Bank, it is because of ARCS trying to 
interpret the order of this Court differently, confusion has 
arisen in disbursement of the amount due to the auction 
purchaser and the Bank for which the auction purchqser and 
the Bank should not be
made to suffer. 
Insofar as the money that they were required to receive on 
or before 24.9.2011 which they have not received, they are 
elllitled to interest for the difference period i.e.,from 24.9.2011 
till they receive the said amoul1f. In that behalf. the ARCS is 
required to pay the interest for the difference period from out 
of the excess amount which is available with him. If the said 
amount is short of interest to be paid for the differe/11 period, 
he is directed to call upon the owner to deposit the said 
amount within ten days therefrom or if the amount is sufficient, 
to pay the interest from out of the amount available and to 
return the remaining amount to the origin.al owner of the 
property. 
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With this observation, the clarification sought to the 
;udgment dated 24.8.2011 is clarified. 
It is made clear that the ARCS shall see that the 
clarificatory order dated 8.6.20112 and the order passed 
today regarding interest for the difference period should be 
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implemented within ten days from the date of receipt of a copy 
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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 tiled 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. 26017 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 wds put to 
auction on 10.9.2008 for Rs. 51,50,0001-. The 3ni responde111 
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. 
59,46,9651- within four weeks. The 3n1 respondent-auction 
purchaser as well as the 4'" respondent Bank were before 
this Court questioning the said order. This Court dismissed 
the
writ petitions, against which W.A. Nos. 1006 and 24331 
2010 were filed. This Court disposed of the writ appeals 
with certain directions in as much as the petitioner was 
directed to deposit Rs. 61,89, 1251- which is interest component 
on the auction amount deposited by the 3n1 respondent. 
2. It appears, the 3n1 respondent-Assistant Registrar of co-
operative Societies was of the view that the petitioner was 
required to deposit Rs. 80,64,9161- and there was short-fall 
ojRs. 18, 75,7911-. 
Hence, an application was filed by the 
petitioner seeking clarification and this Court on two
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
[A. M. KHANWILKAR, J.] 
occasions clarified the position and was of the view that the 
amount deposited by the petitioner was just and proper. 
Notwithstanding the clarification, made, the impugned order 
at Annexure-A is passed calling upon the petitioner to deposit 
the short:fall on calculation. 
3. When the matter is taken-up, Mr. S.R Hegde Hudlamane, 
learned counsel for the 3"1 respondent auction purchaser 
submits that as against the clarificatory order, the auction 
purchaser has filed Special Leave Petition, which is yet to 
come-up before the Apex Court. 
4. In the circumstances, I am of the view that no useful purpose 
will be served by keeping this writ petition pending in as 
much as the decision to be rendered by the Apex Court in 
the Special Leave Petition filed by respondent No. 3 would 
regulate the present proceedings. Till such time, the matter 
is required to be kept pending by the 2'"1 respondent. Hence 
the following order:-
The petition is allowed. The impugned order is set aside. 
The proceedings are remanded to 2"'1 respondent, who shall 
keep pending adjudication. The proceedings shall be 
regulated by the decision to be rendered by the Apex Court". 
21. In the present appeals filed by the appellant-auction purchaser 
before this Court, he has challenged the judgment rendered in writ appeal 
dated 24.8.2011 as well as both the orders passed on clarification 
application dated 8.6.2012 and 29.6.2012
respectively. The debtor, on 
the other hand, has filed appeal against the judgment of the Division 
Bench dated 24.8.2011 in Writ Appeal No. I 006/20 I 0. 
22. We have heard the learned counsel for the parties at length. 
From the indisputable facts mentioned in the preceding paragraphs, it is 
evident 
that the Award passed by the Competent Authority on 
02.01.2004 became final after the dismissal of appeal (Appeal No. 419/ 
2004) by the Karnataka Appellate Tribunal, Bangalore on 30.04.2007. 
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 I Oth August 2008. The appellant- auction purchaser turned 
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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. 1290 I /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. 
8 
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 30'h April, 2007. As a result of which, the Award passed against him 
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had become final. 
23. Be that as it may, it is common ground that the debtor did not 
prefer application for setting aside the sale, inconformity with the remedy 
provided in that behalf in terms of Section 89A of the Karnataka 
Cooperative Societies Act, 1959 read with Rule 38 of the Karnataka 
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Cooperative Societies Rules. That remedy could be availed by the debtor 
only after depositing the awarded amount together with interest thereon 
with the Recovery Officer, in terms of Rule 38(4)(a) of the Rules. The 
application as filed by the debtor was dismissed by the ARCS on 
14.10.2008. Resultantly, the Competent Authority proceeded to confirm
the auction sale on 02.03.2009, followed by grant of a certificate of sale 
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and execution of a Sale Deed in the prescribed Form. The sale of the 
subject property thus, became final. 
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24. The debtor, however, was ill advised to prefer an appeal 
before the Deputy Registrar (CS) of Cooperative Societies, against the 
decision of the Competent Authority confirming the auction sale. For, 
remedy of appeal before that Authority could be availed only in terms of 
Section 106 of the Act, against an order passed by the Authority 
(Registrar) in exercise of powers ascribable to the provisions referred 
to therein. The order of confirmation of sale is ascribable to Section 
89A of the Act read with Rule 38 of the Rules. No remedy of appeal 
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against that decision is provided. Section 106 of the Act does not provide 
for an appeal against the order confirming an auction sale, passed under 
Section 89A read with Rule 38. Section 89A of the Act read with Rule 
38 of the Rules provide for a special dispensation. Thus understood, the 
order passed by the Deputy Registrar (CS) on the appeal preferred by 
H 
the debtor being Appeal No.7/2008-2009, is without jurisdiction. The
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
[A. M. KHANWILKAR, J.] 
learned Single Judge as well as the Division Bench has completely glossed 
over this crucial aspect. 
25. The order passed by the Deputy Registrar (CS) dated l81h 
July 2009, assuming that it is ascribable to Rule 38(6)(a) as held by the 
High Com1, the fact remains that the debtor failed to comply with the 
said order requiring him to pay an amount ofRs.59,46,965/- along with 
interest thereon within the specified time. On account ofnon-compliance 
of that direction, the relief granted by the Deputy Registrar (CS) in terms 
of order dated I 81h July 2009 of setting aside the auction sale became 
ineffective. Admittedly, the debtor deposited a sum ofRs.41,69,200/- on 
61h February 20 I 0 and Rs.20, 19,925/- on 22nd September 2011. That 
was not in compliance with the order dated l 81h 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 l 81h 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 forn1 ofWrit 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 24d• 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 ofRs.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 our view, 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. 
28. The argument pursued on behalf of the debtor that there was 
calculation error in determination of his liability to the extent of 
Rs.59,46.%5/- including the interest accrued thereon as directed; and 
not giving adjustment of the deposits already made prior to the order 
passed by the Division Bench on 24t1t August 2011 as was manifest from 
the no dues certificate given by the Deputy Commissioner, Commercial 
Tax vide letter dated 2ot1t September 20 I 0, cannot be countenanced. In 
the first place, the communication dated September 2010 was tendered 
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[2016] 11 S.C.R. 
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It was not made part of the record before the High Court nor was pressed 
into service before the High Court. Moreover, the said communication is 
In respect of the effect of exemption of 90% of the interest under Tax 
Settlement Scheme. Thirdly, the matter on hand arises out of the order 
passed by the Deputy Registrar (CS) setting aside the sale confirmed in 
favour of the auction purchaser. 
29. As aforesaid, the debtor unsuccessfully challenged the auction 
sale and prayed for setting aside the same by filing writ petitions. That 
relief has been rejected. In that, a formal application for setting aside the 
sale filed by the debtor was rejected by the ARCS on 14. 10.2008. The 
appeal preferred by the debtor before the Deputy Registrar (CS) was 
against the decision of the Competent Authority confirming the auction 
sale on 02.03.2009. That it was not maintainable under Section 106 of 
the Act. The Deputy Registrar (CS) had no jurisdiction. 
30. Further, once the auction sale is confirmed by the Competent 
D 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 oflegislative 
intent of giving finality to the auction sale process upon passing of an 
order of confirmation of sale. 
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31. It is only the Authority referred to in Rule 38, who could have 
set
aside the sale by recording reasons in writing in exercise of powers 
under Rule 38 of the Rules, albeit before passing an order confirming 
the auction sale. Rule 38 reads thus: 
"38. Attachment am/ sale of immoveable property.- {1) 
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 
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have the sale set aside on his depositing with the Recovery
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
123 
[A. M. KHANWILKAR, J.] 
Officer.-
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(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 shall repay to the purchaser 
the purchase money so far as it has been deposited together 
with the 5 per cent deposited by the applicant. 
Provided that, if more persons than one have made 
deposit and application under this sub-n1le, the application 
of the first depositor to the Recovery Officer shall be 
accepted: 
[Provided further that where the purchaser is the 
Government, the sale be set aside if the person owning the 
property or any person interested, therein,-
(i) Makes the application within sixty days from the date of 
sale along with,-
(a) A sum equal to five per cent of the purchase money for 
payment to Government; and 
(b) Fifty per cent of the amount due under the decree for 
payment to the decree holder; and 
(ii) Pay the balance within thirty days
thereafter i.e., within 
ninety days from the date of sale.] 
(c) If a person applies under sub-rule (5) to set aside the 
sale of an immoveable property. he shall not be entitled to 
make an application under this sub-rule. 
(5) (a) At any time within 30 days from the date of the sale of 
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[2016] l l S.C.R. 
an immoveable property, the decree-holder or any person 
entitled to share in a rateable distribution of the assets or 
whose interests are affected by the sale, may apply to the 
Recovery Officer to set aside the sale on the ground of a 
material irregularity or mistake or fraud in publishing or 
conducting it: 
Provided that no sale shall be set aside on the ground 
of irregularity or mistake or fraud unless the said Recovery 
Officer is satisfied that the applicant has sustained 
substantial injury by reason of such irregularity, mistake 
or fraud: 
[Provided further where the purchaser is 
Government the sale will be confirmed,-
( a) After the expiration of sixty days where no application 
to have sale set aside is made under sub-rule (4); or 
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(b) After the expiration of ninety days where an application 
to set aside under sub-rit!e (4) is made but the balance of 
the amount due under the decree is not deposited within 
ninety days from the date of sale.] 
(c) If the application be allowed, the said Recovery Officer 
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shall set aside the sale and may direct a fresh one. 
(6) (a) On the expiration of thirty.days from the date of sale, 
if no application to have the sale set aside, either under 
sub-rule (4) or sub-rule (5) is made or if such application 
has been 111ade and is rejected, the said Recovery Officer 
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shall make an order confirming the sale: 
Provided that if he shall have reason to think that
the sale ought to be set aside notwithstanding that no such 
application has been 111ade or on grounds other than those 
alleged in any application which has bc;en 111ade and 
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rejected, he 111ay, after recording his reasons in writing, 
set aside the sale; 
(b) Whenever the sale of any immoveable property 
is not confir111ed or is set aside, the deposit or the purchase 
money, as the case may be, shall be returned to the 
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purchaser.
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS. 
[A. M. KHANWILKAR, J.] 
(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 receonveyance and 
deposits with the recovery officer with in a period of ninety 
days from the date of coming into force of these rules, -
(a) five per cent of the purchase money as solatium; 
(b) purchase money at the interest of eight and a half 
per cent per annum from the date of sale up to the date of 
deposit." 
32. The order passed by the learned Single Judge dated 7'h 
December 2012 to set aside the communication of the Assistant Registrar 
(CS) dated 21" December 2011 cannot extricate the debtor from the 
consequences of auction sale having become final on issuance of sale 
certificate and execution of the agreement in favour of the auction 
purchaser. Similarly, the fact that the debtor deposited certain amounts 
after the decision of the Division Bench cannot
come to his aid. For, he 
ought to have deposited the awarded amount along with interest accrued 
thereon and that must be accepted by the auction purchaser as satisfaction 
of the order of the Division Bench of the High Court. Admittedly, the 
debtor had failed to pay the entire awarded amount. Significantly, the 
auction purchaser did not acquiesce of the order of the Deputy Registrar 
or that of the High Court, but has challenged the same in the present 
appeals. 
33. We are also of the considered opinion that 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 
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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 succeed on the basis of some observations made in the impugned 
judgments of the Division Bench or forthat matter by the learned Single 
Judge and including some infinnity in the letter of the Assistant Registrar 
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(CS) dated 21" December 2011. 
34. That takes us to the decision of this Court in the case of 
Annapurna vs. Mallikarjun & Anr. 1 That decision is in respect of 
provisions of Order 21 Rule 89 ofC.P.C. The question decided in this 
case is whether the time limit prescribed in Article 127 of the Limitation 
Act, 1963 would come into play even in respect of an application to set 
aside sale in terms of Order 21Rule89 of the Code of Civil Procedure. 
In the present case, the debtor did not choose to file an application for 
setting aside the sale in terms of Rule 38( 4) of the Rules at all. Instead, 
he preferred an appeal under Section I 06 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 I 06 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 I 06 
of the Act, in respect of which remedy of appeal is provided. Further, 
the order passed by the
Deputy Registrar dated l 81h 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.Rlljiv Subrllmllniyan & Anr. Vs. Pllndiyas 
& Ors.1 lllld Vasu P.S/1etty rs. Hotel Vamlana Palace & Ors . .1 Emphasis 
was placed on paragraphs 18 and 29 of the decision in Subramaniyan's 
case (supra). Firstly, that decision is in respect of proceedings under the 
Securitization and Reconstruction of Financial Assets and Enforcement 
of Security Interest Act, 2002. Further, the decision is on the facts of 
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that case. In this case, the grievance regarding under valuation of the 
property could have been raised by the debtor by way of a formal 
application to be filed for setting aside the sale, as per the statutory 
provisions.(Rule 38). That contention is not relevant to answer the matters 
1 (2014) 6 sec 397 
2 (2014) 5 sec 651 
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'(2014)5 sec 660
P. M. ABUBAKAR v. STATE OF KARNATAKA AND ORS .. 
[A. M. KHANWILKAR, J.] 
in issue, in the present case. Reliance was then placed on the dictum in 
paragraphs 23 and 25 in the case ofShetty (supra) to contend that inaction 
or intentional conduct of the debtor does not extricate the Bank from 
following mandatory conditions including proper valuation of the property. 
We fail to understand as to how this decision will come to the aid of the 
debtor who has failed to pursue statutory remedy for setting aside the 
sale as per Rule 38; and moreso after the sale has already been confirmed 
in favour of the auction purchaser. Notably, even after the confirmation 
of sale, the Deputy Registrar showed indulgence to the debtor.to deposit 
Rs.59,46,965/- with interest only at 6% from J 3•h February 2009 till the 
date of payment. The debtor, however, remitted the amount firstly on 61h 
February 20 I 0 a sum ofRs.41,69,200/- and thereafteron 22"d September 
2011 Rs.20, 19,925/-. It was not in conformity with the order passed by 
the Deputy Registrar dated 181h July 2009. 
36. Taking any view of the matter, therefore, we must hold that 
the High Court committed manifest error in dismissing the Writ Petitions 
filed by the appellant- auction purchaser challenging the decision of the 
Deputy Registrar (CS) dated l81h July 2009. The High Court ought to 
have allowed the Writ Petition as the Deputy Registrar had no jurisdiction 
to entertain appeal against the order of confirmation of sale
issued under 
Section 89A read with Rule 38 of the Rules; and also because, admittedly, 
the debtor failed to pay the awarded amount in spite of repeated 
opportunities given to him from time to time. Moreover, the debtor cannot 
succeed in the Writ Petition filed by the auction purchaser and the Bank 
against the decision of the Deputy Registrar and get higher or further 
relief in such proceedings. Thus,. the Division Bench having finally. 
disposed of the writ appeal ought not to have entertained the application 
preferred by the debtor in the guise of clarification and to pass any order 
thereon - which would enure to the benefit of debtor who is in default, 
having become functus officio. 
37. Accordingly, we allow the appeals preferred by the auction 
purchaser (P.M.Abubakar) being Civil Appeals arising out of SLP(Civil) 
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Nos. 30130-30131/2012 and SLP(Civil) Nos. 33314-33315/2012 in the · G 
above terms. The order passed by the Deputy Registrar (dated 
18.7.2009); and of the High Court(dated 11.01.2010; 24.8.2011, 8.6.2012 
and 29.6.2012) confirming the order of the Deputy Registrar of setting 
aside the sale of the subject mortgage property in favour of the auction 
purchaser, are hereby set aside.The Civil Appeals arising out of 
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[2016) 11 S.C.R. 
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SLP(Civil) Nos. 25613-25614/2013 filed by the debtor (Keshava N. 
Kotian) are dismissed with observation that the Appropriate Authority 
shall proceed to disburse the amount already deposited by the debtor 
and including the amount of sale proceeds, in accordance with law 
forthwith. No order as to costs. 
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AnkitGyan 
Appeals disposed of. 
If;