IMPORTANT POINT
The court established that compliance with procedural rules in auction sales is essential, and the burden of proof lies with those challenging the sale to demonstrate fraud or irregularity.

JUDGMENT :

R.M. Joshi, J.

Rule. By consent heard finally at stage of admission.

2. The Petitioner being aggrieved by impugned order dated 3rd April 2019 passed in Revision Application No.20 of 2017 by Divisional Joint Registrar, Co-operative Societies, Kolhapur, whereby the Sale Certificate dated 31st December 2016 was cancelled, has filed this Petition.

3. The version of both sides which led to the filing of the present Petition can be narrated in brief as under:-

The Petitioner is a Co-operative Credit Society. Malgonda Ramgonda Bedkihale, availed loan of Rs.2,85,000/- from society on 30th March 2001. He however, did not return the entire amount of loan along with interest within stipulated time. As the borrower was in arrears, proceeding came to be instituted against him by the Petitioner No.1 Society under Section 101 of the Maharashtra Co-operative Societies Act, 1960 (‘Act’ for short). The recovery Certificate issued therein was put for execution under Section 156 of the Act. It is the case of the Petitioners that pursuant to the Recovery Certificate, auction sale of the property belonging to the borrower was done as per law on 16th January 2007 and thereafter Respondent No.3 granted Sale Confirmation Certificate on 21st March 2007.

4. It is the case of the Petitioner that, Respondent Nos.4 to 7 who are legal heirs of the deceased borrower filed Petition No.181 of 2009 before the Divisional Joint Registrar challenging the Sale Certificate dated 31st March 2007. This Authority by passing order dated 15th January 2010 set aside Sale Confirmation Certificate and remanded the matter back to Respondent No.3 for reconsideration. The said remand was directed for the reason that opportunity of hearing as well as opportunity to deposit the bid amount according to Rule 107(13) of the Maharashtra Co-operative Societies Rules, 1961 (‘Rules 1961’ for short) was not given to Respondent Nos.4 and 7.

5. Pursuant to the said order dated 15th January 2010 the matter was heard by Respondent No.3 by giving opportunity of hearing to all the parties. An order dated 8th December 2014 came to be passed by Respondent No.3 rejecting the grant of Sale Confirmation Certificate. This order was challenged by filing Revision Application No.1 of 2015 under Section 154 of the Act before the Divisional Joint Registrar. This Application came to be allowed by setting aside order dated 8th December 2014. Once again the matter was remanded back for fresh decision to Respondent No.3. This Authority reconsidered the matter and after hearing both sides passed order dated 31st December 2016 confirming said certificate as well as its issuance of Sale certificate and confirmation. This order was challenged before Divisional Joint Registrar by preferring Revision Application No.20 of 2017. The said Revision is allowed by order dated 3rd April 2019, and Sale Confirmation order as well as Sale Confirmation Certificate dated 31st December 2016 were set aside.

6. On the other hand, it is a case of Respondent Nos.4 to 7 that they are heirs of borrower. According to them borrower died on 9th March 2005. It is averred in reply that the Petitioner-Society and Petitioner No.2 Sales Officer had given a notice for auction on 11th December 2006 and it was told to them about death of the borrower occurred on 9th March 2005. It is alleged that, inspite of the knowledge of the fact of the death of the borrower the Petitioner’s auctioned property on 16th January 2007 and Sale Certificate was issued on 21st March 2007. It is claimed by these Respondents that as per provisions of Rule 107(14) of the Rules 1961, it was the duty of the Registrar to look into the proceedings initiated by the Sale Officer and only after due satisfaction that the procedure followed by the Sale Officer is in accordance with law, Sale Certificate could have been issued. It is stated that, Respondent No.3 has failed to discharge his duty and therefore the heirs of borrower had to challenge the said action by way of