Case Note & Summary
The judgment pertains to a batch of writ petitions filed by auction purchasers and judgment debtors challenging the auction sale of a sugar factory conducted under the Maharashtra Co-operative Societies Act, 1960. The petitioner in WP 12835/2016, Ambarwadikar Industries Pvt. Ltd., was the auction purchaser of the sugar factory of Karmaveer Kakasaheb Wagh Sahakari Sakhar Karkhana Ltd. (respondent no.1), which was under liquidation. The auction was conducted by the Liquidator and confirmed by the Commissioner of Sugar. The sale certificate was issued and the petitioner paid the full consideration. Subsequently, the judgment debtor (respondent no.1) and other creditors filed objections before the Co-operative Court and also filed writ petitions challenging the sale on grounds of irregularities, including inadequate price and non-compliance with rules. The High Court examined the scheme of the Maharashtra Co-operative Societies Act, 1960 and the Rules framed thereunder, particularly the provisions relating to attachment and sale of property. The Court held that once the sale is confirmed and the sale certificate is issued, the title passes to the auction purchaser and the sale cannot be set aside merely on grounds of irregularities. The remedy of the judgment debtor is to claim damages, if any, from the liquidator or the society, but not to annul the sale. The Court further held that the Co-operative Court has exclusive jurisdiction to adjudicate disputes arising out of such sales under Section 91 of the Act, and the Civil Court or the High Court under Article 226 cannot interfere with the sale after confirmation. The Court dismissed all the writ petitions, including the one filed by the auction purchaser seeking to set aside the sale on the ground that the property was not free from encumbrances. The Court also dismissed the civil application for intervention filed by State Bank of India. The Court directed that the auction purchaser is entitled to possession of the property and the sale certificate stands confirmed.
Headnote
A) Co-operative Law - Auction Sale - Confirmation of Sale - Once sale is confirmed and sale certificate is issued, title passes to the auction purchaser and the sale cannot be set aside merely on grounds of irregularities; the remedy of the judgment debtor is to claim damages, not to annul the sale. (Paras 10-15) B) Co-operative Law - Jurisdiction - Exclusive Jurisdiction of Co-operative Court - Disputes arising out of auction sales under the Maharashtra Co-operative Societies Act, 1960 are to be adjudicated by the Co-operative Court under Section 91 of the Act, and not by the Civil Court or by way of writ petition under Article 226. (Paras 16-20) C) Co-operative Law - Recovery of Dues - Attachment and Sale of Property - The procedure for attachment and sale of property under the Maharashtra Co-operative Societies Act, 1960 and the Maharashtra Co-operative Societies Rules, 1961 is a complete code in itself, and the provisions of the Code of Civil Procedure, 1908 (CPC) are not applicable. (Paras 21-25)
Issue of Consideration
Whether a writ petition under Article 226 of the Constitution is maintainable to challenge an auction sale conducted under the Maharashtra Co-operative Societies Act, 1960 after the sale has been confirmed and the sale certificate issued, and whether the sale can be set aside on grounds of irregularities after confirmation.
Final Decision
All writ petitions and civil application are dismissed. The auction sale stands confirmed and the auction purchaser is entitled to possession of the property.
Law Points
- Auction sale confirmed and title passed cannot be set aside
- Remedy for judgment debtor is damages
- Not annulment of sale
- Section 103 of Maharashtra Co-operative Societies Act
- 1960
- Order XXI Rule 90 CPC inapplicable
- Co-operative Court has exclusive jurisdiction
