Read Time: 14 minutes

Synopsis

The Supreme Court recently underscored that a writ court does not encourage petitions from indolent, tardy and lethargic litigants as it comes to the aid of one who approaches it with promptitude and before accrual of third-party rights. 

A bench of Justices Dipankar Datta and Prashant Kumar Mishra declined to interfere with a plea by the Ahmednagar District Central Cooperative Bank Ltd against the Bombay High Court's 2017 judgment, dismissing its writ petition with regard to auction of a property of a society which got sanctioned cash credit loan of Rs 95 lakh from the appellant.

The court, however, used its power under Article 142 of the Constitution to direct the Agricultural Produce Marketing Committee, which bought the property in auction sale, to pay to the appellant a sum of Rs 1,05,98,710 (without interest) towards full and final settlement of the dues of the appellant from the society. 

The appellant contended though the property of the society was sold for a paltry amount of Rs 2,51,48,000, it had not received a single penny towards liquidation of the debt and its dues quantified, as on July 23, 2024, were in excess of Rs 5 crore.

It also claimed that the officers in the relevant department of the Government of Maharashtra devised a plan to ensure that the property of the society was ultimately sold to the Agricultural Produce Marketing Committee and that seemed to be the clear reason why the procedure prescribed in the Maharashtra Cooperative Societies Act, 1960 was given a complete go-bye. 

The appellant had attached the immovable property of the society and obtained a valuation of a Government approved valuer on January 21, 2012. The property of the society was valued at Rs 4.10 crore as on January 21, 2012.

The Agricultural Produce Marketing Committee, on the other hand, said there had been no illegality in its selection as the highest bidder and finalising the sale in its favour. That apart, after purchase of the property in 2016, it had been developed by expending substantial amount of money. It would, therefore, not be fair if the auction sale was upset at this distance of time.

Having examined the facts of the matter, the bench said that it was the appellant which, by its negligence, seemed to have allowed the auction process to progress to the extent of finalisation of sale. 

"If indeed valuation of the property of the society suffered from any infirmity, so much so that any reasonable person could form an opinion of the property being undervalued, what has surprised us is the conduct of the appellant in invoking the jurisdiction of the writ court late. Much before the auction took place, the appellant was fairly and squarely aware of the upset price for the auction sale. The appellant, so to say, was sitting on the fence and watching which direction the auction process proceeds," the bench said.

The court also noted that the appellant was seized of the report of a Government approved valuer who valued the property of the society in excess of Rs 4 crore in the year 2013. 

"Since prices of immovable properties seldom decline with passage of time, what was expected of the appellant was to seek interference of the High Court as soon as the auction sale notice dated 12th February, 2016 was published. In its letter dated 2nd March, 2016, the appellant did not object to the valuation. The auction sale notice dated 12th February, 2016 was duly published in the newspapers and did bear reflection of the valuation of the property put up for sale with the upset price, yet, the appellant remained in slumber," the bench said.

The court also pointed out that it had never been the case of the appellant that it had no notice or knowledge of such notice. 

"We have, thus, failed to comprehend as to what prevented the appellant, if at all it was aggrieved by the undervaluation of the property as shown in the notice, to take immediate recourse to available legal remedies to stall the process. The explanation that the appellant was busy in obtaining information after the auction sale was conducted for launching an attack on the process of sale could be correct on facts but by that precious time was lost," the bench said.

Therefore, the court said, it was not open to the appellant to question the auction sale process in question after finalisation of the sale.

The possession of the property had not been taken by the appellant or that its name was not entered in the revenue records are of no significance having regard to the discernible conduct of the appellant in allowing things to drift to its detriment, it added. 

"We are, thus, of the considered opinion that matters which have settled for long ought no to be unsettled," the bench said.

The court, however, felt that merely because the Agricultural Produce Marketing Committee was a creature of a statute, that would not clothe it with any immunity and to have a property transferred to it at a throw away price. 

"After all, the appellant’s status has also to be borne in mind. It is not a private bank but a Co-operative Bank, which has been brought into existence with specific objects and purposes in mind. The interest of the appellant, when its outstanding dues recoverable from the society runs into crores of rupees, cannot be brushed aside and deserves due consideration in order to keep the appellant survive in the banking sector," the bench said.

The court opined that it would only be just and fair to invoke powers conferred by Article 142 of the Constitution to do complete justice between the parties, to direct the Agricultural Produce Marketing Committee to pay to the appellant a sum of Rs 1,05,98,710 (without interest) towards full and final settlement of the dues of the appellant from the society. 

"Let such sum be paid to the appellant within three months from date, failing which the said sum shall carry simple interest at the rate of 6% per annum till such time the payment is actually made," the bench said.

The court also noted that as on July 29, 2024, after clearing the dues of the creditors, an amount of Rs 29,78,499 was reportedly the balance amount. It said that the Liquidator could disburse such amount to the other creditors, excluding the appellant, as per priority. However, if all other creditors have been paid their dues and none else remains to be paid, the said sum or any part of it may be disbursed in favour of the appellant, court ordered.

Case Title: The Ahmednagar District Central Cooperative Bank Ltd Vs The State of Maharashtra & Ors