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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