Bank officials, as custodians of hypothecated goods, are expected to follow proper legal procedures in conducting auctions and extracting maximum amounts from the hypothecated goods.

JUDGMENT :

1. In this writ petition filed under Article 226 of the Constitution of India read with Section 103 of Constitution of J&K State, the petitioner-Bank has prayed for the following writs/reliefs:

a. Certiorari seeking to quash Order dated 30.12.2011 passed by respondent no.4; setting aside order dated 28.05.2008 passed by ld. Registrar and also order dated 10.09.2005 passed by Addl. Registrar Cooperative Societies.

b. Mandamus directing Respondent Nos. 1-3 to pay back an amount of Rs.11,05,444/- upto 30.06.2012 along with interest to the Petitioner Bank on account of Transport Loan availed by Respondent No.1.

2. The facts of the case, in nutshell, are that the petitioner-Bank had advanced transport loan for an amount of Rs.4,26,000/- @ 18% interest per annum to the respondent No.1 for purchase of a Tipper on 27.05.1998. It is averred that the respondent No.1 after paying some installments defaulted the loan installments, much to the chagrin of petitioner-Bank. The last installment paid by the respondents no.1 was on 03.03.2001. When reminders/legal notices sent to the respondent No.1 and his two guarantors for dissuading them not to default loan payments, fell on deaf ears and failed to evoke any response, the petitioner-Bank, left with no alternative, had to seize the vehicle i.e. Tipper No.JK02J-8884 financed by it.

3. It is averred by the petitioner-Bank that the seized Tipper was sold through auction for an amount of Rs.1,10,000/-. The said amount was credited into the loan account of respondent no.1, and for the balance amount, the petitioner Bank filed a petition under Sections 70/72 of Cooperative Societies Act, before learned Registrar Cooperative Societies, Jammu; that the said petition was disposed of, vide order dated 10.09.2005, by the learned Addl. Registrar Cooperative Societies, Jammu, with the direction that Rs.2,00,000/- be further credited to the loan account of respondent No.1. A further direction was issued to the petitioner Bank to hold an enquiry into the auction/bid procedure adopted at the time of auction of vehicle and fix the responsibility on erring officials of the bank and recover the said Rs. 2,00,000/- from them to make good the loss to Bank.

4. Aggrieved of the order dated 10.09.2005, the petitioner-Bank approached the learned Registrar Cooperative Societies, Jammu with a review petitioner, who vide order dated 28.05.2008 upheld the order passed by the learned Additional Registrar Cooperative Societies, which compelled the petitioner-Bank to file a Revision Petition before J&K Special Tribunal, Jammu. The revision petition filed by the petitioner-Bank was dismissed by the learned Tribunal on 30.12.2011. Petitioner-Bank through the medium of this writ petition seeks, setting aside all the aforestated order dated 30.12.2011 passed by the learned Tribunal; the order dated 28.05.2008 passed by the Registrar, Cooperative Societies, Jammu; and the order dated 10.09.2005 passed by the Additional Registrar Cooperative Societies.

5. Mr. Sanjay Kakkar, learned counsel for the petitioner, while reiterating the grounds whereon the impugned orders have been challenged, argued that the order impugned is against the facts and law; that it has been wrongly recorded that the petitioner-Bank had not made its endeavour to recover the loan amount from the respondents and that the bank officials have not conducted the auction of the aforesaid Tipper as per procedure. He further argued that the petitioner-Bank had taken all the steps for recovering of the loan from the respondents by issuance of various reminders/legal notices/ time bound notices and auction notices but despite of its endeavour, the respondents were completely reluctant to pay the loan amount; that Bank officials had observed all the conditions required legally in the auction proceedings including a notice to the respondents besides public notice published in the ‘Daily Excelsior’ and ‘Kashmir Times’ in their editions dated 30.10.2001, inviting op