The discretion of the bank governs if a debtor may sell mortgaged property to satisfy liabilities under applicable cooperative society laws.

JUDGMENT

The petitioner availed credit facilities from the

1^st respondent bank. On default being committed, the bank initiated proceedings under Section 69 of the Kerala Co-operative Societies Act , 1969, and obtained Ext.P1 award determining the liability of the petitioner. On the award being put to execution, the petitioner is before this Court stating that the sale of the property of the petitioner conducted on 11-08-2025 in favour of the 6^th respondent cannot be sustained in law, primarily on account of the fact that the sale was conducted in violation of the stipulations contained in Circular No.70/2013 dated 22-11-2013, which has been placed on record as Ext.P6 along with I.A No.3 of 2025.

2. The learned counsel for the petitioner submits that Ext.P6 Circular, produced along with I.A No.3 of 2025, requires that only such portion of the property that is required to clear the liability shall be sold, and further that the borrower should be afford an opportunity to conduct a private sale of the property and thereby clear the liability towards the respondent bank. It is further submitted that Ext.P6 Circular was issued based on the directions issued by this Court in the judgment dated 04-07-2012 in W.A No. 1229 of 2012.

3. The learned counsel appearing for the respondent bank would submit that the sale of the property of the petitioner was completed in favour of the 6^th respondent. It is submitted that the 6^th respondent has now expressed willingness to withdraw from the sale on account of litigation and that the bank has no objection in granting the petitioner some instalments to clear the liability. It is submitted that the directions issued by the Division Bench in the judgment dated 04-07-2012 in W.A.No. 1229 of 2012 should not be taken as having universal application. It is submitted that the bank also has no objection in the petitioner selling a portion of the property and settling the liability with the bank. It is further submitted that the bank can release the property from mortgage after the entire liability is settled.

4. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent bank, I am of the opinion that the learned counsel for the respondent bank is right in contending that the directions issued by this Court in the judgment dated 04-07-2012 in W.A No. 1229 of 2012 as well as the provisions of Ext.P6 Circular do not lay down a hard and fast rule of universal application that, every time a mortgaged property is brought to sale under the provisions of the 1969 Act, or the Kerala State Co-operative Agricultural and Rural Development Banks Act, 1984, or any other law for the time being in force, an opportunity must first be given to the petitioner to clear the liability. In my view, it is entirely with the discretion of the bank to permit any private sale of the property or portion of it, and it is for the bank to fix the conditions upon which such permission would be granted.

5. In the light of the above findings, this writ petition will stand disposed of, directing that the competent authority of the 1^st respondent bank shall take into consideration Ext.P6 representation submitted by the petitioner and take a decision thereon in accordance with the law within a period of one month from the date of receipt of a certified copy of this judgment. I make it clear that I have not expressed any opinion on the merits of the matter, and it will be open to the 1^st respondent to take a decision on Ext.P6, in accordance with the law, and after affording an opportunity of hearing to the petitioner. It is made clear that if the auction purchaser wishes to withdraw from the auction, he may do so by making a suitable application wit