Court upheld the validity of bank's actions under cooperative law, ruling that delayed challenges based on fraud were insufficient; commercial agreements should be honored.

1. Petitioner, a borrower has, challenged the orders as his prayer to set aside Award dated 23.2.1998 and the Sale Certificate (first sale) were rejected. So also the prayers to quash and set aside the second sale and the sale deed dated 11.6.2006 executed by respondent no.1 (the bank) in favour of respondent no.8.

2. This Court initially had passed an order of status quo on 25th October, 2006. By an order dated 16th November, 2006 directed the petitioner to deposit the amount. The amount was deposited. On 20th December, 2006, this Court admitted the matter. The matter is called out for final hearing. Heard finally after 11 years.

3. The petitioner's mortgaged property is transferred to respondent no.8. The same was sold by the bank in second sale. The bank is not disputing the position. The record itself speaks, so also the orders passed by this Court. There was no stay to the second sale initiated by the bank and, therefore, proceeded further.

4. The parties have relied upon the background events of the litigation by referring the submissions so filed. Multi - State Cooperative Societies Act, 1984 ("Act" for short) and the Maharashtra State Cooperative Society Rules, 1985 ("Rules" for short) are read and referred by the counsel appearing for the parties.

(a) On 17.8.1995 respondent no.1 - Bank sanctioned loan of Rs.96,00,000/- to the petitioner. The petitioner and his sureties signed various bank documents and obtained the loan. The loan was secured by mortgaging property named as "Durgawadi" owned by Petitioner. Property known as "Mollans" (68262 sq.Mts., owned by Shri Ravindra Navelkar was also continued as security to the loan of petitioner. Loan was sanctioned to Petitioner for construction purpose.

(b) On 23.2.1998, the bank initiated recovery case against the petitioner and three sureties. Camp Court passed the award holding all the Principal borrower and three sureties jointly and severally liable to pay the loan dues of Rs. 1,51,58,684/- along with interest at 23% from 1.1.1998 till payment.

(c) On 21.9.2000, since the dues were not cleared, the Bank initiated execution proceedings against petitioner and three sureties. Property "Durgawadi" was put to auction. There were no bidders, therefore, the Bank purchased the same for Rs.87,46,200/- and adjusted the amount in loan account of the petitioner. On 22.9.2000,a Certificate of Sale was issued by the Sale and Recovery Officer in favour of the Bank. On 28.11.2000, since the loan was not fully satisfied, the property "Mallans" of Shri Ravindra Navelkar, the additional security was attached by the Sale and Recovery Officer under R.22.

(d) The petitioner did not apply to set aside the sale, under R.22 (14) (i) of the Rules. The sale confirmation was final in view of 14 (vi) of the Rules.

(e) After five years on 3.1.2003, petitioner filed a dispute before Arbitrator under S.84 of the 2002 Act read with R.38 (14) challenging Award dated 23.2.1998, and sale dated 22.9.2000. On 21.9.2006 respondent no.2 (Camp Court) decided the dispute holding that he has no power to reopen the final award. On 29.3.2006, respondent no.1 (bank) sold the property purchased by it, as its property in Public auction to Mrs. Nirupa V. Pawar (respondent no.8) for Rs. 65,00,000/- and adjusted the amount in Loan Account.

(f) On 9.10.2006, the petitioner filed writ petition before this Court and challenged the auction sale by the Bank, in favour of respondent no.8. On 25.10.2006, this Court granted status quo in the petition. On 16.11.2006 this Court directed the petitioner to deposit legal dues of the bank in Court, with liberty to the petitioner to enter into MOU with thi