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NC: 2023:KHC:33704-DB

WA No. 573 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 19TH DAY OF SEPTEMBER, 2023

PRESENT

THE HON'BLE MR PRASANNA B. VARALE, CHIEF JUSTICE

AND

THE HON'BLE MR JUSTICE KRISHNA S DIXIT

WRIT APPEAL NO. 573 OF 2023 (CS-RES)

BETWEEN:

SRI. R. NAGAPRAKASH,

S/O RAMAIAH SETTY,

AGED ABOUT 51 YEARS,

M/S B.R. COMMERCIALS,

6TH MAIN ROAD, APMC YARD,

TUMKUR-572 103.

…APPELLANT

(BY SRI. DADAKHALENDAR., ADVOCATE FOR

SRI. RAMACHANDRA N.,ADVOCATE)

AND:

1.

THE STATE OF KARNATAKA,

HONBLE MINISTER FOR CO-OPERATION,

DEPARTMENT OF CO-OPERATION,

VIDHANA SOUDHA,

BANGALORE-560 001.

2.

DEPUTY COMMISSIONER OF

CO-OPERATIVE SOCIETIES

TUMKUR DISTRICT, 2ND FLOOR,

MINI VIDHANA SOUDHA,

DEPUTY COMMISSIONER OFFICE BUILDING,

TUMKUR-572 103.

3.

ASSISTANT REGISTRAR OF

CO-OPERATIVE SOCIETIES

Digitally signed

by SHARADA

VANI B

Location:

HIGH COURT

OF

KARNATAKA

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NC: 2023:KHC:33704-DB

WA No. 573 of 2023

(U/R-441), KARNATAKA STATE

CO-OPERATIVE URBAN BANKS FEDERATION

1ST FLOOR, K.H.ROAD

BANGALORE-560 027.

4.

TUMKUR GRAIN MERCHANTS

CO-OPERATIVE BANK LTD.,

B.H.ROAD, TUMKUR - 572 103.

REPRESENTED BY ITS

CHIEF EXECUTIVE OFFICER

5.

T.S. SHANKAR PRASAD,

S/O T. SHIVANNA,

AGED ABOUT 61 YEARS,

R/AT 6TH CROSS ROAD,

LINK ROAD, SIT EXTENSION,

TUMKUR-572 103.

…RESPONDENTS

(BY SMT.NILOUFER AKBAR., ADDL. GOVERNMENT ADVOCATE

FOR R1 TO R3;

SRI. DEVI PRASAD SHETTY., ADVOCATE FOR C/R5)

THIS WRIT APPEAL FILED UNDER SECTION 4 OF THE

KARNATAKA HIGH COURT ACT, 1961 PRAYING TO i) SET ASIDE

THE ORDER PASSED WRIT PETITION No. 45548/2015 DATED

23.03.2023 AND ALSO ORDER PASSED IN REVISION PETITION

No. 20/CAP/2020, VIDE ANNEXURE-H TO THE WRIT PETITION

AND ALSO ORDER PASSED IN APPEAL No. 02/2006-07 DATED

28.05.2011 IN VIDE ANNEXURE-F IN THE WRIT PETITION AND

ii) PASS SUCH OTHER WRIT, DIRECTIONS, ORDERS AS THIS

HONBLE COURT DEEMS IT FIT UNDER THE FACTS AND

CIRCUMSTANCES OF THE CASE TO MEET THE ENDS OF

JUSTICE.

THIS APPEAL COMING ON FOR PRELIMINARY HEARING

THIS DAY, CHIEF JUSTICE DELIVERED THE FOLLOWING:

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NC: 2023:KHC:33704-DB

WA No. 573 of 2023

This intra-court appeal calls in question a learned

Single Judge's order dated 23.3.2023 whereby, appellant's

W.P.No.45548/2015 came to be dismissed. What led to

the Writ Petition was the cancellation of a public auction of

a property on the ground that it was conducted contrary to

the norms obtaining in the realm. There were intermediary

proceedings of appeal and revision at the hands of

statutory authorities. At the end of the day, the auction

stands quashed, and that is the grievance of appellant.

2.

Learned counsel appearing for the petitioner

argues that learned Single Judge fell in error in not

noticing the infirmities with which the order impugned

before him was fraught. He also submits that by no

measure, it could be said the bid amount in the auction

was too low and therefore, the said auction was liable to

be faltered. Learned Additional Government Advocate

appearing for the official respondents and learned counsel

representing the caveator respondent makes submission in

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justification of the impugned order and the reasons on

which it has been structured. They seek dismissal of the

writ petition.

3. Having heard the learned counsel for the parties

and having perused the papers, we decline indulgence in

the matter inasmuch as the finding of the learned Single

Judge as to the auction money being too low to be

mentioned and therefore the same has caused prejudice to

the caveator respondent is well reasoned. Public auction

is one of the modes of disposal of properties in execution

of money decrees, cannot be disputed. Where such

auction is being undertaken under special statutes, the

same has to be in accordance with the rules of reason and

justice. If the bid amount in auction is too low, as was the

case at hands, the same would result into prejudice not

only to the owner of the property but at times to the

lenders to whom huge sums of money are due.

There is yet another reason as to why we

decline interference in the matter. The Apex Court, in a

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recent decision in RAJIV KUMAR JINDAL vs BCI STAFF

COLONY RESIDENTIAL WELFARE ASSOCIATION, 2023 SCC

ONLINE SC 507 at paragraphs 24 and 25 has observed as

under:

"24. The object of the auction is to secure

optimum realizable value of the property by

giving opportunity to the potential buyers

facing competitive bids either in open or closed

format. The terms 'auction' or 'bid' are inter-

related as both give the idea of selling the

product to the public. Bidding involves the

process where a person offers a price which is

known as a bid. The process of bidding takes

place in a situation where large number of

people show their willingness to buy a

particular product or a service and bidding in a

sealed envelope is often used…auction is the

process that involves buying and selling goods

and services by offering them for bids, taking

bids and selling the item to the highest bidder

and that is possible if there is a competitive

bidding between the bidders.

25. The purpose of auction (open or close

format) is to get the most remunerative price

and giving opportunity to the intending bidders

to participate and fetch higher realizable value

of the property. If that path is cut down or

closed, the possibility of fraud or to secure

inadequate price or underbidding would loom

large. In the given circumstances, it is the

duty of the Court to exercise its discretion

wisely and with circumspection and keeping in

view the facts and circumstances in each

case."

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Learned Single Judge at para 11 of the judgment has

rightly observed as under:

"11. A perusal of the bid sheet indicates that one

of the bidders' bid only for a few bids short

amount and exited, and subsequently, the bid

continued between two other bidders with each of

them raising the bid by 1,000/- until it reached

Rs.4,60,000/- when it was struck down in favour

of the petitioner. These factors not inspiring any

confidence, the rights of respondent No.5 being

infringed upon have been rightly c

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