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2008 DIGILAW 373 (KAR)

Y. Lalith Holla v. Recovery Officer

2008-07-18

D.V.SHYLENDRA KUMAR

body2008
Judgment :- (This writ Petition is filed under Articles 226 And 227 of the Constitution of India praying to quash the order dated 31-12-2005 passed by the fourth respondent vide Annexure-H and etc.) Petitioners in this writ petition are persons who had stood as guarantors, guaranteeing repayment of loan borrowed by M/s. Mushti Designs Pvt Ltd., represented by its managing director; M. Arunkumar, who had borrowed certain sums from the first respondent – Bangalore district and Bangalore Rural district Co-operative Central Bank Ltd., Chamaajpet, Bangalore. 2. Theborrower having failed to repay the amount with interest etc., the bank had raised a dispute, the matter went before arbitrator and resulted in passing an award in favour of the bank, jointly against the borrower and the petitioners-guarantors. 3. The first respondent bank which had levied execution for realizing the awarded amount, initially against the assets of the borrower by attaching the plant and machinery, which had been secured in favour of the bank for repayment of the loan, and on noticing that the offers by the bidders to purchase the machinery part, the best offer being for a sum of Rs.35.00 lakh, being of the opinion that this amount was not sufficient to satisfy the award amount in full, it appears did not pursue further action for realizing the amount as against the attached properties of the borrower, but instead later on proceeded against the property belonging to the petitioners, who had mortgaged the subject property in favour of the bank guaranteeing repayment of the loan. The property in question is and immovable property bearing Corporation Nos. 42 and 42/1, Bull Temple Road, Bangalore-4, wherein, it appears, a hotel by name Dwaraka Hotel/Dwaraka Lodge was being run and which was sought to be sold in public auction. The auction sale in itself was conducted through the recovery officer of the bank, who is an official of the state government in the rank of an assistant registrar and who is deputed to the bank and who would function and remain in the bank as the recovery officer for the bank. The recovery officer in fact conducted the auction on 16-2-2004, in which auction, the fifth respondent to this writ petition – a private individual – appears to have purchased the property by offering a price of Rs.41,04,000/-. 4. The recovery officer in fact conducted the auction on 16-2-2004, in which auction, the fifth respondent to this writ petition – a private individual – appears to have purchased the property by offering a price of Rs.41,04,000/-. 4. While the auction purchaser figures as fifth respondent to this writ petition, the recovery officer himself is impleaded as first respondent, the joint registrar of co-operative societies, who functions as a statutory functionary as registrar under the Karnataka Co-operative Societies Act, 1959 [for short, the Act], as second respondent, the state government is impleaded as third respondent and the assistant registrar of co-operative societies, I Circle, Bangalore as fourth respondent. 5. The petitioners are primarily aggrieved by the manner in which the property had been sold in the public auction sale and have questioned the legality of the auction sale urging various grounds including the ground of want of jurisdiction on the part of the first respondent and violations of statutory provisions, particularly the provisions of Section 101 of the Act read with Rule 38(2)(i) & 38 (2)(j) of the Karnataka Co-operative Societies rules, 1960 [for short, the Rules). 6. In terms of Section 101, an award made under Section 71 is to be treated on par with a decree of civil court and can be executed as though it is a decree of a civil court or in the alternative it can also be executed according to the law and the rules for the time being in force for recovery of land revenue, on a certificate signed by the registrar or any persons authorised in this behalf. 7. It is averred by the petitioners that in pursuance of the auction sale on 16-2-2004 with the fifth respondent offering a price of Rs.41,04,000/-, the fifth respondent, who was required to deposit the full sale price within the stipulated time from the date of auction sale in terms of the provisions of Rule 38(2)(h) and (i) of the Rules and that further action for non-deposit in terms of Rule 38(2)(j) of the Rules were also not followed by the respondent-officers. It is further averred that in terms of the order dated 3-12-2004, the government passed an order extending the time to deposit the money and on the basis of this order, the fifth respondent deposited a sum of Rs.34,83,000/- as on 13-12-2004. 8. It is further averred that in terms of the order dated 3-12-2004, the government passed an order extending the time to deposit the money and on the basis of this order, the fifth respondent deposited a sum of Rs.34,83,000/- as on 13-12-2004. 8. Following this, it is averred, the petitioner had filed an application for setting aside the auction sale in terms of application dated 3-1-2005, contending that they were not aware of the auction sale for want of proper notice. It is further averred in the writ petition that as on 24-2-2005, the sale certificate was issued by the competent officer in favour of fifth respondent and following this, the petitioners approached this court by filing WP.No.11984 of 2005. The said writ petition was disposed on in terms of order dated 7-12-2005, directing the respondents to consider the applications of the petitioners filed on 7-5-2003 and 3-1-2005, which were the applications for discharging the liability of the petitioners as guarantors in terms of Section 141 of the Contract Act and for setting aside the sale transaction, and dispose of the same after giving opportunity to the petitioner. 9. On such remand, the matter was taken up before the assistant registrar in case No.50/2005-06 and it is the version of the petitioners that the matter which was being adjourned from time to time, was, without any further notice to the petitioners, closed in terms of the order dated 31-12-2005. Under this order, the assistant registrar while allowed the application of the auction purchaser for recovery of possession on the premise that the property in question had been registered in the name of auction purchaser before the jurisdictional sub-registrar on 21-2-2005 and further it was corrected on 17-3-2005 and the applicant was entitled to be put in possession and therefore the owners of the property and figuring as respondents 1 to 5 in the application and the tenant in a portion figuring as sixth respondent were required to vacate the premises and hand over the possession to the auction purchaser. 10. Under the very order, the assistant registrar, purporting to act on the direction issued by this court in terms of the order dated 7-12-2005 in WP.No.11984 of 2005, rejected the application filed by the present writ petitioners on the premise that their version that the auction sale had taken place without notice to them cannot be accepted. 10. Under the very order, the assistant registrar, purporting to act on the direction issued by this court in terms of the order dated 7-12-2005 in WP.No.11984 of 2005, rejected the application filed by the present writ petitioners on the premise that their version that the auction sale had taken place without notice to them cannot be accepted. The assistant registrar has indicated that the owners had not availed the opportunity in terms of rule 38(4)(a) of the Rules by depositing the amount as required under Rule 38(4)(a) within the stipulated time as a ground for rejecting the application for setting aside the sale. It is thereafter, the petitioners have come up with the present writ petition, seeking for quashing of the orders at Annexure-H and J and for a direction to restore the possession of the premises in favour of the petitioners as per the directions issued by this court, purported to be in WP No.11984 of 2005 and also for a further direction to respondents 1 and 2, who, according to the petitioners, had not complied with the directions issued by this court in terms of the earlier order dated 7-12-2005 in WP.No.11984 of 2005. 11. However, as during the pendency of this writ petition before this court, in terms of the order dated 3-3-2006 (Annexure-K) under which the second respondent-joint registrar of co-operative societies- also rejected the applications which had been directed to be considered by this court in terms of order dated 7-12-2005 in WP No.11984 of 2005 and by way of subsequent amendment sought for quashing of this order also. 10.12. It is in this background of all these facts, the present writ petition has been filed for the relief, which if granted, would result in not only setting aside the sale transaction in favour of the fifth respondent but also for restoration of the possession of the property in question in favour of the petitioners. 113. The main grounds urged in support of the writ petition are that the fourth respondent-assistant registrar had no jurisdiction to reject the application for setting aside the sale transaction, which had been filed by the petitioners invoking Section 101 of the Act read with Rule 38 of the Rules. 113. The main grounds urged in support of the writ petition are that the fourth respondent-assistant registrar had no jurisdiction to reject the application for setting aside the sale transaction, which had been filed by the petitioners invoking Section 101 of the Act read with Rule 38 of the Rules. Further ground is no proper enquiry has been held in respect examination of the applications even in terms of the directions issued by this court in the order dated 7-12-2005 in WP.No.11984 of 2005, and that the joint registrar, who had adjourned the hearing to 3-3-2006, without even hearing the petitioners, simply accepted the version of the third respondent who has no jurisdiction to entertain an application of the nature and the petitioners were required to file an appeal in terms of Section 106 of the Act and the application for setting aside was not tenable etc.; that this order has come to be passed without hearing the petitioners and even otherwise the order is bad as one not complying with the directions issued by this court in the earlier round of litigation and also contrary to the provisions of Section 101 of the Act read with Rule 38(4) and (5) of the Rules. 114. The petitioners have by drawing comparison to the provisions of Rule 38 with Order XXI, particularly Rules 88, 80 and 96 of the Rules, have contended that the manner in which the auction sale was conducted, the manner in which the sale was confirmed even without the auction purchaser complying with the statutory provisions by depositing the amount within the prescribed time and the manner in which the possession was taken and handed over to the auction purchaser are totally contrary to the provisions of Rule 38 and the corresponding provisions of Order XXI CPC, that the authorities acted in a highhanded manner in forcibly disposing the petitioners and the tenants in the property on the very day of the passing of the order on 31-12-2005; that the order passed subsequently on 3-3-2006 is more a farce and was only to escape the consequence of noncompliance with the directions issued by this court in the order dated 7-12-2005 in WP.No.11984 of 2005; that this order under Annexure-K is not even a bona fide order; that it deserves to be quashed. The petitioners have mainly urged the glaring statutory violations in putting the property to auction sale and have sought for quashing the proceedings relating to the auction sale and the consequential proceedings for putting the fifth respondents in possession. 115. The respondents had been put on notice and they have entered appearance through counsel. Ms Asha M. Kumbaragerimath, learned government pleader appears for respondents 1 to 4 and the fifth respondent-auction purchaser is represented by Sri. M.S. Purushothama Rao, on behalf of Sri. H.S. Dwarakanath, who filed power for this respondent. 16. Statement of objections has been filed on behalf of the fifth respondent-auction purchaser, who quoted documents at Annexure-R1 to 10. An additional statement of facts has also been placed before the court in the course of arguments. 17. On behalf of the respondents 1 to 4 while no separate statement of objections has been fled, the learned government pleader has placed before the court the records maintained by the second respondent and particular attention is drawn to the detailed order passed on 3-3-2006, which is available in the record. 18. Though it is termed as record maintained by the second respondent – registrar of co-operative societies, in the context of the proceedings before him, purporting to be in compliance with the directions issued by this court in the order dated 7-12-2005 in WP.No.11984 of 2005, the so-called record produced before the court by the learned government pleader appears to be more in the form of a paper book to which pages extracted from other records have been added and a compilation is prepared. As is very obvious on a mere look at the pagination given to the papers placed in this file, which already have two series of pagination with the first page itself containing page No.63 as well as 105, though for the purpose of filing before this court, it is characterized as page No.1, It is very obvious that the second respondent has avoided scrutiny into the records and has placed only some papers selectively extracted from the records which gives an impression that there is definitely suppression and may be much more in manipulation or correction of the records etc. In a certiorari proceedings, the respondent-authority is required to place the record as it is and not to meddle or manipulate. In a certiorari proceedings, the respondent-authority is required to place the record as it is and not to meddle or manipulate. It is quite a serious matter this court takes note of this lapse and suitable orders are to be passed at the end of this order. .19. In a certiorari proceedings, the respondent-authority is required to place the record as it is and not to meddle or manipulate. It is quite a serious matter this court takes note of this lapse and suitable orders are to be passed at the end of this order. .19. Inthe statement of objections filed on behalf of the fifth respondent, it is urged, inter alia, that the writ petition is not tenable for the reason that the petitioners have not availed of the statutory appellate remedy; that the challenge to the government order (annexure-J) permitting extended time to deposit the balance sale price is not tenable for the reason that the very government order was subject matter of the writ petition in the earlier round of writ litigation by the very petitioners and that the prayer having not been granted, it cannot again be made subject matter of writ of certiorari I this petition, that the relief sought for is barred by applying the principles of Order II Rule 2 CPC; that there was no stay of the execution proceedings in the earlier writ petition filed by the very petitioners; that the direction was only to consider the applications of the present petitioners as at Annexure-F and K in that writ petition and if the execution proceedings had proceeded with even during the .pendency of the above writ petition, no exception can be taken, as there was no stay of the award in the earlier writ petition; that the objection raised to the manner of taking possession of the property even by dispossessing tenants, cannot be heard at the instance of the petitioners, who are not tenants and the tenants themselves have not complained; that the claim that there were as many as 18 tenants is not supported by any material on record; that the allegation of collusion between the bank and the borrower to the detriment of the petitioners, who stood as sureties, is also not within the scope of enquiry before the executing officer and so also in this writ petition; that even as per the pleadings in the earlier writ petition, while Annexure-F application had been filed before the joint registrar, which is so pleaded, in respect of annexure-K application for setting aside and if that was the position, there was no occasion for the first respondent-recovery officer to examine the applications and even in terms of the order dated 7-12-2005 in WP.No.11984 of 2005, most of the execution proceedings was over and unless some other order was passed by a higher authority, during the pendency of the examination of 2003 and 2005 applications the challenge to the present Annexure-H and J is not tenable in law; that there is no merit in the present writ petition and it is to be dismissed. 20. While the fact that possession of the property in question was taken even as on 31-12-2005 is admitted, it is denied that the possession was taken after the sunset. It is also disputed that the entire premises was in the occupation of tenants, but to the extent that the hotel in the name and style of Hotel Dwaraka was one amongst the occupants, the fact is admitted. It is averred that the articles in the hotel were simply kept there and not thrown out and that there was no protest by the petitioners or the occupants (of the building) and the allegation to the contrary is denied. The proceedings leading to the issue of sale certificate and taking of possession are all claimed to be in accordance with law and in the absence of any stay order granted for the execution of the award, it is claimed that the entire action was very much permitted in law and is in accordance with law and therefore it is urged that no interference is warranted. 21. While it is admitted that the building which was on the subject matter-premises was demolished, it is disputed as to whether it was demolished on the very day of the taking possession or later. 22. The action on the part of the fourth respondent – assistant registrar of co-operative societies – is pleaded to be valid and in order. It is also pleaded that the fourth respondent has merely acted in discharge of his official functions and that he did not act only to favour fifth respondent, as alleged in the petition. .23. It is also pleaded by the fifth respondent that it was to the knowledge of the petitioners as they wanted the order is to be pronounced, if the petitioners do not seek for any further stay of the order and if the order is implemented, they cannot complain at this point of time, particularly if they had not sought for stay of the impugned judgment and order as and when the order was passed by the .fourth respondent. The fifth respondent has pleaded that neither act of eviction nor demolition of the structure is contrary to law and that the petitioners are not entitled to seek restoration at this point of time. The fifth respondent has pleaded that neither act of eviction nor demolition of the structure is contrary to law and that the petitioners are not entitled to seek restoration at this point of time. The fifth respondent has also disputed that the petitioners have suffered loss of Rs.25.00 lakh due to the forcible taking of possession and demolition of the structure therein. 24. While it is pleaded that the government had the power and authority to permit extension of time for payment of balance sale price, the confirmation of the sale having not been challenge in the earlier litigation, it is not now open to the petitioner to challenge the very confirmation of sale in the present case and therefore the fifth respondent has prayed for dismissal of the writ petition with costs. 25. In the background of such factual pleadings and legal contentions urged, the learned counsel for the parties have addressed arguments. I have heard Sri. C.B. Srinivasan, learned counsel appearing for the petitioners, M/s. Rameshchandra and M.S. Purushothama Rao, learned counsel for the fifth respondent, instructed by Sri.H.S. Dwarakanath and Ms. Asha M. Kumbaragerimath, learned Government Pleader for respondents 2 to 4, while the first respondent recovery officer of the bank is represented by Sri. Shashivardhan. 9.26. Sri. I have heard Sri. C.B. Srinivasan, learned counsel appearing for the petitioners, M/s. Rameshchandra and M.S. Purushothama Rao, learned counsel for the fifth respondent, instructed by Sri.H.S. Dwarakanath and Ms. Asha M. Kumbaragerimath, learned Government Pleader for respondents 2 to 4, while the first respondent recovery officer of the bank is represented by Sri. Shashivardhan. 9.26. Sri. C.B. Srinivasan, learned counsel for the petitioners, has mainly urged that the auction sale conducted on 6-4-2004 is vitiated firstly for the reason that it is without proper notice or opportunity to the petitioners – owners of the property; that the first respondent recovery officer who has conducted the auction sale has not conformed to the statutory procedure envisages in terms of Section 101 of the Act read with Rule 38 of the Rules; that there was a violation of mandatory and statutory provisions at the very threshold, as the fifth respondent auction purchaser had not deposited the balance of purchase price viz., 85% of the auction sale consideration and other amount as stipulated under the Rules, that when once there is non-compliance with these statutory requirements under Rule 38(2)(i) of the Rules, the sale itself does not come into picture; that the auction purchaser in fact even could lose the initial deposit amount in terms of the provision of Rule 38(2)(j) on the passing of the order to that effect that the recovery officer, that after this stage, there would have been inevitably a fresh proclamation published indicating the next date of auction sale in terms of Rule 38(2)(k) of the Rules, that such deviation from the stipulated statutory procedure finds the sale transaction from its beginning; that there is no sale in the eye of law; that when once the sale is annulled from its inception, all further action purporting to follow the sale transaction viz., issue of sale certificate, entertaining of the applications for recovery of possession and handing over of possession and all subsequent actions, get nullified; that the entire action taken by the recover officer is null and void and therefore all subsequent actions are required to be quashed by issue of a writ of certiorari and the petitioners put back into their earlier possession. .27. .27. Sri Srinivasan has also contended that the recovery officer not pursuing the action for realizing the value of the movable properties in respect of which the intending bidders have offered a price upto 35 lakh even as on 12-8-1997, even as per the admission of the fifth respondent would virtually discharge the surety, as the decree holder has consciously given up security in the value of the movables to this extent, which could have substantially satisfied the decree or the award and giving up the movables belonging to the very judgment debtor and upto the value of Rs.35.00 lakh and much later proceeding in respect of immovable properties of the sureties is not permitted in terms of Section 134 read with Section 141 of the contract Act. Submission is that if the available security of principal borrower itself is given up, then automatically the surety is discharged and therefore no action in law led against the petitioners-surety particularly for bringing the property of the petitioners for auction sale for realizing the amount owed by the principal borrower to the first respondent-bank. 10.28. In support of the submission that the entire proceedings have become a nullity in law for noncompliance with the mandatory statutory provisions of Rule 38(2)(i) and (j) of the Rules, Sri. C.B. Srinivasan learned counsel for the petitioners has placed reliance on the decision of the Supreme Court in the case of Manilal Mohan Lal vs. Sayed Ahmed (AIR 1954 SC 249). It is submitted that thought the decision was rendered in the context and while interpreting the proceedings under Order XXI Rules 81, 85 and 86 CPC, the corresponding provisions under the Rules viz., Rule 38 being almost in pari material to these provisions under CPC, and the purpose and intend of both the provisions being the same, the ratio or this decision of the Supreme Court equally applies and therefore urges that all proceedings beginning with the auction sale conducted on 16-2-2004 and thereafter all are voided and therefore the petitioners are entitled to succeed in this writ petition. 129. Sri C.B. Srinivasan, learned counsel for the petitioners has also relied upon the subsequent decision of the Supreme Court in the case of Rao Mahamood Ahmed Khan vs. Ranbir Singh ( AIR 1995 SC 2195 ), wherein the earlier view taken in the case of Manilal Mohanlal (supra) has been reiterated. 129. Sri C.B. Srinivasan, learned counsel for the petitioners has also relied upon the subsequent decision of the Supreme Court in the case of Rao Mahamood Ahmed Khan vs. Ranbir Singh ( AIR 1995 SC 2195 ), wherein the earlier view taken in the case of Manilal Mohanlal (supra) has been reiterated. Sri Srinivasan has further submitted, by drawing attention to the pleadings in OS.No.11038 of 1998, a suit that had been filed by the petitioners herein for an order of injunction against the recovery officer and the bank, on the premise that the petitioners were discharged of the liability as sureties, particularly, the written statement filed on behalf of the fifth respondent, who was the second defendant in that suit, particularly para – 47, as pleaded in the writ petition, and also the objections filed to the interlocutory applications as contained in para-3, to point out that the movables of the judgment debtor had been taken over by the recovery officer, but was not realized as it was found that the value offered to that movable properties was Rs.35.00 lakh as against the total liability of Rs.45.00 lakh and urges this as a circumstance to hold that the petitioners were discharged, as the recovery officer has not realized the exclusive properties belonging to the judgment debtors, but only looking at the sureties’ immovable properties and the manner in which the property was sold and taken possession on the very day of the sale, indicates a very clear bias on the part of the recovery officer, who, it is alleged, acted in collusion with the fifth respondent to the detriment of the petitioners and had thrown to winds all procedural requirements, violated all statutory provisions and in fact took law into his own hands and dispossessed even the tenants, who were otherwise required to be not disturbed, but only symbolic possession delivered Rule 38-A(80)(c) of the Rules, which reads as under: .(8) Thetransfer of property under sub-rule (5) shall be effected as follows: .(a) xxx .(b) xxx .(c) Where the property is in the possession of a tenant or other person entitled to hold the same by a title acquired before the due date of issue of a certificate under Section 101 the court or the Deputy Commissioner or the registrar, as the case may be, shall order delivery to be made by attaining a copy of the certificate of transfer of the property to the society in some conspicuous place on the property and proclaiming to such person by beat of drum or other customary mode at some convenient place, that the interest of the defaulter has been transferred to the society. And not only dispossessed the tenants by throwing them out physically and their articles, in a highhanded manner, but also demolished the building on the very day and such action clearly amounts to a biased, highhanded action on the part of the recovery officer to favour the fifth respondent; that the arbitrary manner in which the statutory provisions under Rule 38 have been exercised also vitiates the entire proceedings being in violation of the Article 14 of the Constitution of India. 30. Sri. C.B. Srinivasan learned counsel for the petitioners also submits that if the direction issued by this court in the earlier round of writ litigation by the very petitioners, wherein this court in fact has kept all questions open, and the directions being for examination and passing of proper order that having not been complied with by the very authority to whom the directions had been issued by this court, while there is non-compliance with the directions issued by this court and to this extent there is a lapse on the part of the respondent-authorities and the proceedings of the first respondent while does not substitute for a compliance of directions issued by this court, the action on the part of first respondent being independently vitiated, as contended earlier, the entire action is to be quashed. .31. It is also submitted by Sri. .31. It is also submitted by Sri. Srinivasan that the subsequent order produced at Annexure-K to the writ petition, purporting to be an order passed by the second respondent joint registrar is only a farce of an order, which has neither obeyed with the directions issued by this court nor has examined any of the contentions urged on behalf of the petitioners independently considered, but is only an evasive order, seeking shelter under Section 106 of the Act by indicating that the applications were not tenable, in view of the alternative remedy, whereas, in fact, Section 106 is not attracted to the .present situation and the application in terms of Rule 38(4) and 38(5) of the Rules was required to be considered independently, particularly when the petitioners were urging that the sale transaction was bad in law and liable to be set aside not only on the ground of material irregularity in the conduct of the sale, but also by the partisan and arbitrary action on the part of the first respondent recovery officer and though setting aside is by the first respondent recovery officer in terms of the Rule 38(5), this court having directed the second respondent also to do the examination and enquiry for such relief, it was incumbent on the part of the second respondent to have examined the application on its merit and not to have evaded examination on the pretext of the availability of an alternative remedy under Section 106 of the Act and therefore urges for quashing of the order at Annexure-K also. 2.32. It is also submitted by Sri. C.B. Srinivasan, learned counsel for the petitioners, that the provisions of Order II Rule 2 CPC are not attracted to the present situation, particularly as this court had not foreclosed any issues in the earlier round of litigation but had kept open all issues and had only remanded the matter for a proper examination by the respondents on the applications of the petitioners in terms of Annexure-F and K in that writ petition. It is also submitted that there is neither any delay or laches on the part of the petitioners, particularly, as the challenge is to the sale proceedings in terms of auction sale conducted on 16-2-2004, which is being diligently and persistently questioned by the petitioners; that the writ petition in WP.No.11984 of 2005 had been filed promptly following the so called sale transaction and taking over of possession etc., and even the subsequent auction has been questioned and there is no let up on the part of the petitioners to deny the relief under writ jurisdiction on ground of delay and laches and therefore prays for allowing the writ petition and for quashing the entire auction proceedings including the orders at Annexure-H, J & K. .33. Sri. Sri. M.S. Purushothama Rao, learned counsel appearing for the fifth respondent, on the other hand, has very vehemently urged that the very writ petition itself is not tenable, as the present petition and the most of the prayers questioning the legality of the orders which had been passed before the institution of the earlier round of writ litigation and therefore cannot be pursued in this writ petition on the principles of Order II Rule 2 CPC; that there is no merit in the contentions that the auction sale transaction was without proper or due notice to the petitioners, as the petitioners were all along aware of the attempt on the part of the bank to bring the property of the petitioners to auction sale even in the year 1997 and to ward off it, they had filed OS.No.11038 of 1998 and the petitioners had on their own volition withdrawn the suit, though after filing the present wit petition, that in itself cannot be a ground to plead that the petitioners were not aware of the auction sale in the year 2004; that want of notice cannot be a ground, as even otherwise it reflects lack of diligence on the part of the petitioners, particularly when the petitioner were aware that the decree holder bank had not been paid the amount payable by the judgment debtors; that this court not having reserved any liberty or leave in favour of the petitioners while passing orders in WP.No.11984 of 2005, such of those relief which had been prayed therein and not granted and which could have been prayed and .not prayed cannot be sought for in the present writ petition on the principles emanating from the provisions of Order II Rule 2 CPC and therefore urges that it is not open to the petitioners to question the legality of the either the sale certificate or handing over of possession in favour of the fifth respondent. 3.34. It is also submitted that any order passed under Section 101 of the Act read with Rule 38 of the Rules can be made subject matter of an appeal under Section 106 of the Act, as has been rightly observed by the second respondent joint registrar and therefore also this writ petition should not be entertained. 4.35. 3.34. It is also submitted that any order passed under Section 101 of the Act read with Rule 38 of the Rules can be made subject matter of an appeal under Section 106 of the Act, as has been rightly observed by the second respondent joint registrar and therefore also this writ petition should not be entertained. 4.35. It is thirdly urged that the sale transaction having become final, the petitioners having been issued with the sale certificate and also took possession of the property way back in the year 2005 and more than three years having elapsed thereafter, the process has become irreversible and while there cannot be any restitution, particularly as the fifth respondent has now put up a structure, said to be at a cost of more than Rs.12 lakh, as urged in the statement of objections file to the main petition and now revised to Rs.1.00 crore in the additional affidavit sworn to on 19-6-2008 during the course of arguments of this petition, it is urged that the fifth respondent will be put to great loss and hardship if there is any direction for restitution of the possession of the property in favour of the petitioners; that on an equitable consideration such a course of action is neither permissible nor should be attempted and while the petitioners could have recourse to other remedy, there cannot be any relief for either quashing the sale quashing or for restitution of the property in favour or the petitioners and therefore prays for dismissal of the writ petition. In support of this submission Sri Purushothama Rao has placed reliance on the decision of the Supreme Court in the case of Swami Shankaranand (D) By Lr Versus Mahant Sri Sadguru Sarvanand Etc & Ors. ((2008) INSC 995 (27th May 2008). For the same reason, learned counsel for the fifth respondent urges that the legality of the order at Annexure-K need not be examined by this court, as it is open to the petitioners to pursue the appeal under Section 106 of the Act. 5.36. Sri. ((2008) INSC 995 (27th May 2008). For the same reason, learned counsel for the fifth respondent urges that the legality of the order at Annexure-K need not be examined by this court, as it is open to the petitioners to pursue the appeal under Section 106 of the Act. 5.36. Sri. Purushothama Rao has also submitted that the petitioners lack bona fide, for the reason that the petitioners could have avoided the sale transaction going through by making payment of the decretal amount while did not choose to deposit the decretal amount before the recovery officer and did not seek the sale in terms of Rule 38(4) of the Rules, are now estopped from approaching this court for relief in the extraordinary jurisdiction, particularly when the conduct is not bona fide and have not deposit the decretal amount before the recovery officer, and even till date, the petitioners have not deposited the decretal amount and therefore this court cannot interfere in the matter. .37. In so far as the so-called highhanded action on the part of the first respondent recovery officer in evicting the tenants by physically disposing them, whereas the rules did not envisage their physical dispossession but only a symbolic delivery being given to the auction purchaser, submission of Sri. .Purushotham Rao, learned counsel for the fifth respondent submits that the complaint being not on the part of the tenants, who if at all were dispossessed and if the aggrieved person is not before the court, no notice should be taken of this contention, particularly for invalidating the action for taking possession of the property on the application made by the auction purchaser for putting him in possession. 6.38. 6.38. Sri Purushothama Rao also submits that to the present situation, provisions of Section 134 or 141 of the Contract Act are not attracted, for the reason that the bank had not given up any security which had been offered by the judgment debtors, but had chosen to enforce its right on the secured property which could fetch better price and a better satisfaction of the decretal amount; that in law, there is no discharge of the surety and therefore the arguments build up on the premise that Sections 134 and 141 of the Contract Act disentitle the first respondent recovery officer to put the property of the surety i.e., the property of the petitioners herein to auction sale is not tenable argument. 7.39. Appearing on behalf of the statutory respondents i.e., respondents 2 to 4, Ms. Asha M. Kumbaragerimath, learned government pleader would very vehemently urge that the writ petition is not tenable, that the petitioners have to avail of the statutory remedy by way of an appeal under Section 106, which is an efficacious remedy; that all actions taken by the second or fourth respondent are all in consonance with law; that there is no infirmity even in the action of the first respondent recovery officer; that there are no violations of any procedure or even of a substantial provision; that the writ petition is not tenable and liable to be dismissed. .40. .40. Learned government pleader, with reference to the government notification No CMW 243 CLM 91 dated 4-5-1994, published in the Karnataka Gazette Extraordinary, dated 25-8-1994 and issued by the state government in exercise of its power under sub-section (5) of Section 2-A of the Act, particularly the power delegated in favour of the assistant registrars appointed as recovery officers under Rule 441 of Karnataka Civil Service Rules, deputed to a financing bank, would point out that the power exercisable in terms of Section 88, 89-A, 89-D, 99, 100, 101, 101-B of the Act and also under Rules 33-B, 37(5)(a), 38-A, 46, 48, 49 and 49-C(2) of the rules, have all been delegated in favour of the assistant registrar who also happens to be function as a recovery officer in a financing bank and therefore it is only the recovery officer who acts as the assistant registrar and that the petitioners have deliberately and mischievously split up the function of the assistant registrar who function as recovery officer as two officers by showing him as first and the fourth respondent; that any argument built on the premises that the first respondent recovery officer lacks jurisdiction to exercise any of the power of the assistant registrar is baseless; that the first respondent recovery officer is basically an assistant registrar also, functioning as the recovery officer for the purpose of the bank and he has not only the power of recovery officer in terms of the statutory provision, but also the power delegated in his favour in terms of this notification and therefore submits that all .actions taken by the first respondent recovery officer is also within the powers of the first respondent recovery officer and in exercise of such statutory powers as assistant registrar, who is the recovery officer. Accordingly, the action on the part of the respondent-authorities and the impugned orders are defended as justifiable action. 8.41. I have given my anxious consideration to the submissions made at the bar. I have also examined the petition pleadings and the so-called record placed by the learned government pleader, said to be of the proceedings before the second respondent-joint registrar. 9.42. Let me firstly deal with record placed before the court by the learned government pleader. 8.41. I have given my anxious consideration to the submissions made at the bar. I have also examined the petition pleadings and the so-called record placed by the learned government pleader, said to be of the proceedings before the second respondent-joint registrar. 9.42. Let me firstly deal with record placed before the court by the learned government pleader. As observed above, the file before the court does not appear to be a record maintained in the normal course of official transaction, particularly for holding an enquiry and disposal of the applications of the petitioners in terms of the directions issued by this court in the order dated 7-12-2005 in WP.No.11984 of 2005. This file does contain the order dated 3-3-2006 (Annexure-K), which is also sought to be quashed by seeking amendment of the petition pleading prayer, particularly as this order has come into existence during the pendency of this writ petition. The order, on a perusal, while is clearly a non-compliance with the directions issued by this court, is also not tenable on merits, for the simple reason that the applications filed by the petitioners-judgment debtors for setting aside the sale transaction, are conspicuous by their absence in the file and which were required to be death with under the provisions of Rule 38(5) of the Rules and on consideration if had resulted in an order, perhaps could have been subject matter of further appeal etc. There being no disposal of the applications in the eye of law, the order is not an order in the eye of law; that the reasoning is nothing but one of overlooking the statutory provisions of Rule 38(4) and (5) of the Rules and therefore the order obviously cannot be sustained and deserves to be quashed. .43. More important question is as to the legality of the execution proceedings, particularly of the sale transaction, confirmation of sale, taking of possession, putting the auction purchaser in possession etc. In so far as these proceedings are concerned, it started on 16-2-2004. I do not propose to examine the developments prior to this auction sale, for the reason that what can be examined in a writ petition of this nature is only the legality of the statutory procedure and as to whether the statutory authorities or functionaries have adhered to the statutory provisions contemplated in law. I do not propose to examine the developments prior to this auction sale, for the reason that what can be examined in a writ petition of this nature is only the legality of the statutory procedure and as to whether the statutory authorities or functionaries have adhered to the statutory provisions contemplated in law. The statutory provisions in the present situation is one in the context of execution of an award and for realizing the amount due to the decree holder payable by the judgment debtors. The execution proceedings, even in terms of the Rule 38, a procedure more or less akin to the procedure under Order XXI CPC, though is for a like purpose and on like terms, to the extent the proceeding as provided in the rules varies form the procedure under CPC, it is only the procedure envisages under the Rules that will have to be followed ad therefore a scrutiny in respect of a complained action on the part of the respondent-authorities has to be decided only on the touchstone of the provisions of Rule 38 of the Rules read with Section 101 of the Act and not necessarily with reference to the .provisions of Order XXI CPC per se. 10.44. Let me now examine the legal contentions urged by Sri. C.B. Srinivasan learned counsel for the petitioners that the action on the part of the first respondent recovery officer in proceeding against the property of the petitioners who were sureties and whose property has been secured guaranteeing repayment of the loan of the principal debtor has been contrary to the provisions of Section 134 read with 141 of the Contract, I find that it is not necessary for this court to examine the merits of this contention for the simple reason that the present writ proceedings are not a proceeding for examining the legality of the award suffered by the petitioners. When once it is not in dispute that there was a joint award against the principal debtor and also the petitioners-sureties, the petitioners become judgment debtors in their own capacity and it is little difference they were surety earlier. When once it is not in dispute that there was a joint award against the principal debtor and also the petitioners-sureties, the petitioners become judgment debtors in their own capacity and it is little difference they were surety earlier. Discharge of a surety or otherwise due to the conduct on the part of the creditor is an aspect touching upon the liability of the surety and could be urged only in a proceeding determining the liability of the surety, which has resulted in an award. When once there is an award against the surety, the legality of the award cannot be questioned in execution proceedings before the recovery officer or any other authority other than the authority which has competence and jurisdiction to look into the legality of the award as an appellate authority or a revisional authority etc. so long as there is a joint award as against the petitioners herein also and so long as the award or any part of the award is not satisfied for the awarded amount or balance awarded amount, action can definitely be pursued against the petitioners, as there is an un-discharged award outstanding against the petitioners also. 11.45. The argument of Sri. Purushothama Rao, learned counsel for the fifth respondent, based on the principles of Order II Rule 2 CPC, while requires to be negatived for like reason, that argument also falls to the ground, as this court had remanded the matter and not concluded any aspect against the petitioners in the earlier round of litigation. The present order is one arising in the proceedings which had taken place pursuant to the remand and direction issued by this court and therefore the principles of Order II Rule CPC do not apply, as the said principle is attracted only in a situation when an earlier proceeding had been concluded and what was subject matter or what could have been the subject matter and in respect of which relief had not been obtained, cannot be agitated again by fresh litigation. .46. That leaves the question of legality of the proceedings taken up by the first respondent recovery officer for conducting auction sale and follow up action. .46. That leaves the question of legality of the proceedings taken up by the first respondent recovery officer for conducting auction sale and follow up action. In this context, learned counsel for the petitioners has placed reliance on the reported single Bench decision of our high Court in the a case of Abbubaker Beary vs. Asst Registrar of Co-operative societies (1986 (1) Kar LJ 316). This court while interpreting the provisions of Rule 38(2)(i), (j) and 38(5) of the Rules had categorically ruled that time stipulation for deposit of the purchase amount and even time stipulation for depositing of stamp duty amount were mandatory; that while the sale officer had been given a discretion to extend the time only for the deposit of the stamp paper or value upto 30 days, no such discretion was .available in respect of the bid amount and if the amount was not deposited within the permitted time, the recovery officer was bound to set aside the sale and put up the property for re-auction in terms of the provisions of the rules, the provisions as of now while provides an outer time limit nor any power conferred on any authority in its discretion to extend time for deposit of the amount. 12.47. It is with reference to this provision, Sri. C.B. Srinivasan, learned counsel for the petitioners has submitted that on the failure of the auction purchaser to deposit the balance of the purchase money within 45 days from the date of sale, then whether or not the amount already deposited is forfeited or otherwise, the property in question should be subsequently sold by following the procedure envisaged under clause-k of sub-rule (2) of Rule 38 of the Rules. Submission is that the transaction automatically gets voided on non-compliance of the requirement of deposit within the stipulated time in terms of Rule 32(2)(i) of the Rules and if any proceedings are taken contrary to the provisions of clause-j of sub-rule (2) of Rule 38 of the rules, they are all nullity in the eye of law and it is for this reasons learned counsel for the petitioners would submit that the so-called confirmation of sale, issue of sale certificate, entertaining an application of the auction purchaser for putting the purchaser into possession, dispossession of the petitioners and their tenants, are all null and void and therefore they fall to the ground. In respect of such submission, reliance is placed on the decision of the Supreme Court in the case of Manilal Mohanlal (supra). 13.48. The other submission being procedural irregularity with regard to the manner in which the application of the auction purchaser was entertained for the purpose of handling over possession (of the property in question) to the purchaser, notwithstanding vehement opposition and objection raised on behalf of the petitioners-owners. It is in this context attention is also drawn to the provisions of rule 38-A(8)(C) of the Rules about the symbolic delivery of possession being given to the auction purchaser even if the auction purchaser was entitled to seek possession of the property and violation of this statutory provision also. 14.49. If the proceedings of the first respondent recovery officer are voided even at the stage of Rule 38 (2)(i) of the Rules, while further examination of the violation of the subsequent statutory provisions may only be an academic exercise, this court cannot help but notice the arbitrary manner in which the first respondent recovery officer has exercised the power and the desperate haste with which the property was sought to be taken possession of on the very day when the application of the auction purchaser had come to be allowed etc. .50. This conduct is noticed only to observe that even an existing power if arbitrarily exercised or abused to victimize any person, the exercise of power becomes bad and the consequent action also gets vitiated. In an execution proceedings merit in the sense the legality of the decree cannot be questioned, by the only safeguard in respect of the manner in which a decree is executed particularly by sale of property belonging to the judgment debtors. Sale of a dwelling unit or other life .sustaining immovable property providing income and sustenance to the judgment debtors should be utilized for realizing or satisfying a decree as the last resort and not necessarily the first choice and that too after following the very procedure envisaged in the execution proceedings. A perusal of the provisions of Rule 38 of the Rules clearly indicates that at every stage opportunity is contemplated to be given to the judgment debtors to satisfy the decree and to avoid the sale of property. This safeguard given to the judgment debtor should be adhered to and implemented in letter and spirit. A perusal of the provisions of Rule 38 of the Rules clearly indicates that at every stage opportunity is contemplated to be given to the judgment debtors to satisfy the decree and to avoid the sale of property. This safeguard given to the judgment debtor should be adhered to and implemented in letter and spirit. The safeguard is meant to be observed and not to be discarded. The Supreme court has taken the view that non-adherence to statutory provisions voids the sale transaction as indicated in the case of Manilal Mohanlal (supra) and followed in the subsequent decisions. If the ratio of the decisions of the Supreme Court in Manilal Mohanlal is to be applied, there is no escape from holding that the so-called auction sale conducted on 16-2-2004 pursuant to which the auction purchaser did not deposit the bid amount within the permitted time, is no auction sale in the eye of law, in the sense there is no sale, as the sale though termed as one at the initial stage, becomes a no sale on and after noncompliance with the statutory requirement under rule 38(2)(i) of the Rules. .51. While petitioners have sought for quashing of the government order permitting the deposit of the balance amount within the particular time passed at the request of the auction purchaser in terms of the order at Annexure-J and Sri Purushothama Rao, learned counsel for the fifth respondent, has sought to support this order with reference to the provisions of Section 108 of the Act, which empowers the state government to suo moto revise any order etc., I am afraid, the submission fails not only on the basis of the law as interpreted by this court in the case of Abbubaker Beary (supra) but also on the submission of the learned counsel for the petitioners that the power conferred on the State Government under section 108 of the Act is one to examine the record of any case or proceeding, in the sense that it should be a proceeding which was a quasi-judicial proceeding and adjudicatory in nature for determining and resolving the inter se disputes amongst the parties. .At any rate reference to the provision of Section 108 of the Act does not sustain the order passed by the state government at Annexure-J and Annexure-J has no sustenance in law and therefore cannot come to the aid of the fifth respondent to save the sale transaction from the clutches of Rule 38(2)(i) and (j) of the Rules. .52. While there was an application under Rule 38(5) of the Rules for setting aside and it was in this context the matter had been remanded to the authority concerned, the object and intent of an application under Rule 38(5) is also to have the sale set aside on the ground of procedural irregularity, mistake or fraud. While sub-rule (5) of rule 38 does stipulate a provision for making an application etc., and it is one of the contentions urged on behalf of the fifth respondent that the application had not been made within such time limit, it is not necessary to examine this contention further, as in the light of the view taken as indicated above, about the consequence of noncompliance with the requirement of Rule 38(2)(i) and (j) of the Rules, if the further proceedings are .even otherwise voided, it makes little difference as to whether it is achieved under Rule 38(5) or even otherwise. The only difference could be that the provisions of Rule 38(2)(i) and (j) of the Rules operate on their own with or without an application, as that is a legal position and that results due to a non-compliance with the statutory requirements even if the proceedings had not been voided in view of an earlier provision, an application under Section 38(5) can be made and if the applicant is able to satisfy that grounds are made out within the scope of Rule 38(5) for setting aside the sale, that can be achieved even otherwise in terms of Rule 38(5). The examination is avoided in the present case. 15.53. The above legal position only leads to one more aspect to be examined, as urged by Sri Purushothama Rao, learned counsel for the fifth respondent, i.e., the need or prudence to disturb the sale transaction said to have been taken place three years earlier and on the pleadings that the fifth respondent has subsequently developed the property, has made considerable investment and that possession should not be disturbed on equitable consideration. 16.54. 16.54. I find in the present case, the plea of equitable consideration is not even available to the fifth respondent, when one looks at the manner in which the fourth respondent put the fifth respondent in possession of the property and the desperate haste with which he has achieved it. It is a tell-tell story that the fourth respondent was acting in collusion with the fifth respondent and to favour the fifth respondent. Such biased favoured action vitiate the exercise of the statuary powers and at the same time does not leave scope for the erring party to plead equity at a later stage when things have worked adverse to the interest of such a person. I find that the plea of equitable consideration is only to be rejected. .55. The other ground urged on behalf of the fifth respondent was delay etc., which again fails for the reason that when the challenge is only to the recovery proceedings, particularly of auction sale and the auction sale on after the stage of the rule 38(2)(i) and (j) of the rules, is found to be null and void in law, the delay question does not arise and at any rate cannot come in the way of this court granting relief as a consequence of the declaration of the legal position. Courts are institutions meant to enforce rule of law and to correct the erring party particularly an erring statutory functionary when this court exercises power of judicial review, whether this court exercises jurisdiction under Article 226 or under article 227 of the Constitution of India, when glaring statutory violations are brought to the notice of the court in a proceeding which is brought to this court in the normal course of events, it is but inevitable the consequences are visited upon the erring persons and relief provided to the offended person or persons who are victims of statutory violations. As observed in the beginning of the order, examination in this writ petition is only about the legality of the recovery proceedings and nothing more. A setting aside of a sale transaction and the subsequent proceedings taken by the respondents is on the premise that it is not a sale in the eye of law, and such setting aside of the sale transaction does not touch upon or affect the liability of the judgment .debtors. A setting aside of a sale transaction and the subsequent proceedings taken by the respondents is on the premise that it is not a sale in the eye of law, and such setting aside of the sale transaction does not touch upon or affect the liability of the judgment .debtors. It is made clear that so long as an undischarged decree or an unsatisfied award is there, it is open to the decreed holder or persons in whose favour the award is made to realize the award in the manner provided in law. That course of action while is still open to the bank but the present action sale conducted on 16.2.2004 is set aside and all subsequent actions fall to the ground. 17.56. On the question of relief to the petitioners while in the prayer a request is made for restitution of possession of the property in question and normally in Civil Procedure Code an application is contemplated under Section 144 seeking restitution etc., I find in the present situation, the prayer made in the writ petition is sufficient for that purpose and therefore the first respondent recovery officer is directed to restore possession of the property in question to the petitioners forthwith, as a consequence of this order. The first respondent recovery officer may allow two week’s time from today to the fifth respondent to clear his articles and things on the premises before implementing this order. This direction issued to the first respondent recovery officer as it was the first respondent recovery officer who had dispossessed the petitioners and their tenants from the property and had put the fifth respondent in possession and as that action found to be bad in law. 18.57. That still leaves the question of damages sought for by the petitioners as compensation for the illegal demolition of the structure that was there in the property on the day when the first respondent recovery officer sought to take possession and handed over possession to the auction purchaser. The initial deposit of Rs.6,15,600/- which had been deposited by the auction purchaser on the day of auction which could have been forfeited on non-depositing of the balance sale price within the stipulated forty-five days of an order to this effect, by the first respondent recovery officer, instead is awarded as costs in favour of the petitioners payable by the fifth respondents to the petitioners. From out of the balance sale price, the expenditure incurred for the auction sale and likely to be incurred for reauction can be deducted and the balance amount be returned to the fifth respondent by the first respondent recovery officer out of the funds of the first respondent–bank. It is open to the bank to realize the awarded amount in the manner known to law and following due procedure. 19.58. The conduct of the first respondent recovery officer while is totally unbecoming of a government servant and being age betraying a partisan attitude calls for proper scrutiny and commensurate action by the disciplinary authority. The manner in which the second respondent joint registrar of cooperative societies has functioned and the manner in which the second respondent has discarded the direction of this court and the manner in which records are sought to be placed before this court without any seriousness or concern to adhering to the basic requirement of placing true and original records before the court is only to be deprecated and the disapproval of such conduct by this court may be placed in the service record of the second respondent –joint registrar also. 20.59. In the result this writ petition is allowed with cost as indicated above. Annexure –H J and K are quashed by issue of a writ certiorari. 21.60. Rule made absolute.