P. M. ABUBAKAR versus STATE OF KARNATAKA AND ORS.

Citation: [2016] 11 S.C.R. 103 · Decided: 17-11-2016 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Disposed off

Judgment (excerpt)

[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 
103 
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104 
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B 
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SUPREME COURT REPORTS 
[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, o

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