V. Venkatachalam vs The Deputy Registrar of Co-operative Societies, Srivilliputhur

A. Raman, J.—The plaintiff is the appellant herein.

The plaintiff filed a suit for a direction to the defendant to confirm the sale and restrain the defendant from bringing the properties to fresh

auction. The suit was decreed by the trial court. Against which an appeal was preferred to the District Court, Srivilliputhur by the defendant and

the appeal was allowed. Hence, the plaintiff has now come forward with this second appeal.

There is no dispute with regard to the facts involved in this case. An extent of 5 cents in S.No. 778/la with the well is the subject matter of the

suit. Besides the said property, a cattle shed, vacant site around it and four wells, belonged to Mamsapuram Co-operative Society. The Society

was dissolved. For the realisation of government dues by the society, its properties were brought up for sale by way of auction. The cattle shed

was first auctioned out for Rs.55,000. Since the highest bidder did not pay the bid amount, it was not concluded. The other items were brought up

for sale. The plaintiff bid at the auction for Rs.12,400. He deposited the said sum. Since Narayana Raja, the bidder for cattle-shed filed a writ,

challenging the auction, the defendant wrote to say that the sale in favour of the plaintiff will be confirmed only after the proceeding in the High

Court was over. While so, on 18.4.1991, the defendant wrote to say that the sale has been set aside. Hence, the present suit.

From Ex.A.l, we find that the sale has been set aside only on the ground that the amount bid at the auction was less and that it did not fetch

proper price. No order was passed by the Deputy Registrar within time. On the other hand, the order that was passed was only long after. In

Ex.A3 they have written to state that in view of the pendency of writ proceeding, the defendant would take steps for confirming the sale after the

same is over. Again it has been stated on 26.12.1990 that after receiving the Order from the Registrar of Co-operative societies, necessary order

will be passed conforming the same. While so, on 18.4.1991, the Deputy Registrar has sent an intimation stating that since the bid amount of the

plaintiff is less, under Rule 129 of the Act, the sale is set aside. Rule 129 of the Co-operative Societies Act does not give power to the Deputy

Registrar to set aside the sale at any time or at his convenience. The right to set aside the sale has to be exercised within reasonable time. If such a

right is not exercised within time, it would follow that the sale has been confirmed. The Department never took the stand that the price it fetched

was low. They have definitely stated that they would take steps to confirm the sale, after proceeding in the High Court is over. It is not shown that

the proceeding in the High Court had to do something with the confirmation of the sale in favour of the plaintiff. Nor it is the case that there was any

stay.

Rule 129 of the Co-operative Societies'' Act does not invest Deputy Registrar with any wide power to set aside the sale or at any time. In the

circumstances, he ought to have given a notice, informing the plaintiff of his proposal to set aside the sale and should have given him an opportunity,

to represent his case and then should have passed the order. The sale was held in the month of April 1990. The Order passed by the Deputy

Registrar under Ex.A6 is in April, 1991. Therefore, the Order passed by the Deputy Registrar is not a valid Order. He had no right to set aside the

sale. The power to set aside the sale would arise only if it is exercised within reasonable time of the sale, especially if it is a suo motu exercise of

power. Here, it has not been exercised within reasonable time. Nor the plaintiff has been put on notice, informing him about the proposal to set

aside the sale. Having held out that they would take steps for confirmation, they are estopped from setting aside the sale. Such a power under Rule

129 can be exercised immediately after the expiration of 30 days, the period provided u/s 121(1) earlier part. It is not known when the writ was

disposed of by the High Courts. The records relating to the writ are not produced. The decision to set aside sale has been taken abruptly. It is not

a just order.

Therefore, in such circumstances, the Order passed by the District Judge, Srivilliputhur, cannot be accepted at all. The District Judge has not

taken pains to go through the facts of mis case. It is also to be pointed out that it is not established that the price it fetched was low. What was the

property that was brought up originally for sale, whether it was inclusive of the wells or not and what was the property that was sold in favour of

the petitioner in the auction as to that, we do not have any material from the side of the defendant. Nor the defendant has chosen to produce any

document into Court to speak to the value of the property.

In the above circumstances, the Order passed by the Deputy Registrar, setting aside me sale is unwarranted and beyond his powers. The

District Judge has failed to advert to the important circumstances and to the Rule. There is no inherent power in the Deputy Registrar to set aside

the sale at his convenience. The sale is not set aside within reasonable time. Once it is not set aside within reasonable time, it would follow that it

has been accepted and has to be confirmed.

In the result, this appeal is allowed, but without costs. The judgment and decree of the lower appellate court are set aside. The suit will stand

decreed without costs. Consequently, Civil Miscellaneous Petition Nos. 10228 of 19% and 4842 of 1997 shall stand dismissed.