The court emphasized that auction sales must adhere to statutory requirements and principles of natural justice, ruling that collusion invalidates the auction process.

Judgment :

(Ravindra Kumar Agrawal, J.)

1. Present writ appeal has been filed by the appellant, who was the petitioner in writ petition, against the impugned order dated 25.10.2024 passed by the learned Single Judge in Writ Petition No.1326 of 2006, whereby the writ petition filed by the petitioner has been dismissed.

2. Brief Facts of the case as emerges from the pleadings of the parties in the writ petition are that the appellant/petitioner was owned 9.4 hectare (23 acres) of agricultural land, situated near Hathbandh Railway Station, at village Sitapar, Tehasil Simga, District Raipur CG with various Khasara numbers. To improve the agricultural fields and the activities, petitioner purchased a tractor after obtaining loan of Rs.3.25 lakhs from the District Cooperative Krishi evam Gramin Vikas Bank, Maryadit, Branch Simga (for short, ‘Cooperative Bank, Simga’) in the year 2000. Due to some unavoidable circumstances, the petitioner went under serious losses which resulted into inevitable defaults in repayment of loan amount and its installment.

3. By the time of sanctioning the loan in favour of the petitioner, he mortgaged his agricultural land of 9.4 hectare with the Bank. Market value of the land of the petitioner was more than its existing recorded value and it was the irrigated land, as the petitioner installed a tube well also there.

4. On 25.07.2005, the petitioner received a notice from the respondent/Bank, allegedly issued on 27.06.2005, and came to know about the fact that on 27.06.2005 land of the petitioner was auctioned by the Bank and respondents 4 & 5 have purchased the land of petitioner in auction for total consideration of Rs.8,31,000/-. The auction purchaser was directed to deposit 15% of the total sale consideration which comes to 1,24,650/- on the date of auction itself, and the remaining amount of 85% which comes to 7,06,350/- should be deposited up to 11.07.2005, so that proceeding of sale confirmation may be started. It is also pleading of the petitioner that he immediately replied and expressed his willingness for settlement and stated that the entire auction sale proceeding was held RHT manner, no news paper publication was made and no proper procedure has been drawn for auction sale of the property and all of a sudden petitioner’s land was put to auction. It has also come into knowledge of the petitioner that only two bidders i.e. respondents 4 & 5 were present, whose bid was confirmed and there was no competition. All these exercises clearly show that in the garb of recovering loan from the petitioner, his valuable property admeasuring 9.4 hectare of agriculture land was auctioned for a meager amount of Rs.8.31 lakhs. He also came to know that the auction amount of Rs.8.31 lakhs is almost similar to the same which is outstanding against the petitioner for his loan amount i.e. the principal amount of Rs.3.25 lakhs, and its interest.

5. The petitioner again received a notice dated 16.08.2005 that if he does not deposit the amount recoverable from him by 16.09.2005, the auction sale would be confirmed. Thereafter, the petitioner submitted a detailed objection before the Dy Registrar, Cooperative Society, Raipur, on 17.08.2005 but the objection of the petitioner was not considered. Another letter dated 25.08.2005 was issued to the petitioner for handing over the possession of subject land. On 15.09.2005, petitioner again submitted his objection before the Joint Registrar, Cooperative Society to cancel the auction, however the Joint Registrar, vide its order dated 18.11.2005, confirmed the auction in exercise of its power under Section 28(3) of the Chhattisgarh Sahakari Krishi & Gramin Vikas Bank Act, 1999 (for short, ‘Act of 1999’). Before passing the order on 18.11.2005, neither the petitioner nor his counsel was noticed for hearing on his objection dated 17.08.2005.

6. Being aggrieved by the order dated 18.11.2005, petitioner preferred an appeal before the Joint Registrar, Cooperative Society, Raipur vide Ap