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2010 DIGILAW 289 (AP)

Shyam Trading Company v. M. Krishna

2010-04-12

P.V.SANJAY KUMAR, T.MEENA KUMARI

body2010
JUDGMENT :- (SK, J) An auction sale of immovable property under the Andhra Pradesh Co-operative Societies Act, 1964 and the Rules framed thereunder is called in question. By order dated 07.02.2005 in Writ Petition No.1303 of 2005, a learned Judge reversed the Judgment of the Andhra Pradesh Co-operative Tribunal, Hyderabad and upheld the said auction sale. Hence, this appeal by the erstwhile owner of the property. The appellant, a proprietary concern, suffered the Award dated 06.05.2000 in ARC No.81/2000-OSD under Section 61 of the Andhra Pradesh Co-operative Societies Act, 1964 (hereinafter, ‘the Act of 1964’), whereby it was directed to pay the Charminar Cooperative Urban Bank Limited, Hyderabad, the sixth respondent herein, a sum of Rs.27,24,810/- with interest at 21% per annum within two weeks. In the event of default, the sixth respondent Bank was held entitled to recover the entire dues jointly and severally from the Proprietor, Shyam Prasad, and the guarantors, personally or from their properties, movable and/or immovable or both. Aggrieved thereby, the appellant filed CTA (SR) No.6370 of 2001, which was thereafter numbered as CTA No.239 of 2003, before the Andhra Pradesh Co-operative Tribunal, Hyderabad (hereinafter, ‘the Tribunal’). The Tribunal granted interim stay of the operation of the Award subject to the appellant depositing a sum of Rs.7.50 lakhs within one month. As the appellant failed to comply with the said condition, the sixth respondent Bank sought execution of the Award in E.P. No.21 of 2001. Under Section 70 of the Act of 1964, the Registrar of Co-operative Societies is empowered to recover the amount due under the decision of an Arbitrator by sale of the property of the person against whom such decision has been passed. As the Proprietor, Shyam Prasad, had mortgaged his properties with the sixth respondent Bank while availing the loan facility, recovery was sought to be effected in execution by bringing to sale the Proprietor’s house and site admeasuring 300 square yards in Plot No.60, Survey No.160, Thokatta Village, Secunderabad Cantonment, Secunderabad. The proclamation of sale under Rule 52(11)(e) of the Andhra Pradesh Co-operative Societies Rules, 1964 (hereinafter, ‘the Rules of 1964’) was issued by the Deputy Registrar of Co-operative Societies on 07.07.2001 fixing the date of auction sale as 13.08.2001, a clear 30 days after the date of the proclamation as required by the Rule. The proclamation of sale under Rule 52(11)(e) of the Andhra Pradesh Co-operative Societies Rules, 1964 (hereinafter, ‘the Rules of 1964’) was issued by the Deputy Registrar of Co-operative Societies on 07.07.2001 fixing the date of auction sale as 13.08.2001, a clear 30 days after the date of the proclamation as required by the Rule. However, it appears that the auction sale did not take place on the stipulated date and a second sale proclamation was issued by the Deputy Registrar of Co-operative Societies on 20.12.2001 fixing the date of the auction sale as 23.01.2002. The gap of a clear 30 days between the dates of the proclamation and the auction sale was again maintained. However, once again, the sale did not take place on 23.01.2002 leading to the issuance of a third sale notice on 11.04.2002 whereby the auction sale was proposed to be held on 24.04.2002. Yet again, the sale was not conducted on the said date leading to the issuance of the fourth sale notice dated 01.08.2002 fixing the date of the auction sale as 24.08.2002. Relevant to note, neither the sale notice dated 11.04.2002 nor the sale notice dated 01.08.2002 provided a 30 days gap before the date of the auction. The sale notice dated 01.08.2002 was served upon the appellant, which moved an application in the pending CTA (SR) No.6370 of 2001 seeking stay of the sale proceedings on 24.08.2002. This I.A. was filed on 21.08.2002 but immediately thereafter, on 22.08.2002 the appellant approached this Court by way of Writ Petition No.15814 of 2002. The appellant sought a writ of certiorari to quash the notice dated 01.08.2002 and to hold that the proposed auction of the appellant’s property was illegal, arbitrary and contrary to statutory provisions. Notice in the said writ petition was served on the sixth respondent Bank on 23.08.2002. The writ petition was disposed of by a learned Judge of this Court on 06.09.2002, without adjudication of the matter on merits. The learned Judge took note of the fact that the appellant had deposited an amount of Rs.6.50 lakhs to establish its bona fides and accordingly granted time till 07.01.2003 to the appellant to pay the balance amount due to the sixth respondent Bank. Relevant to note, the sixth respondent Bank, through its counsel, agreed to the said disposal and also agreed not to proceed with the sale of the property. Relevant to note, the sixth respondent Bank, through its counsel, agreed to the said disposal and also agreed not to proceed with the sale of the property. The learned Judge also added a default clause that if the appellant failed to make the payment as agreed, the sixth respondent would be at liberty to proceed with the sale. It appears that the auction sale of the property fixed on 24.08.2002 was conducted, though the same was not disclosed during the proceedings in W.P.No.15814 of 2002. Thereby, respondents 1 and 2 herein came into the picture. M.Krishna, respondent 1, along with his father, M.Ramesham, participated in the auction sale and emerged as the highest bidders. However, the name of M.Virupakshi, respondent 2 herein, the mother of M.Krishna, was introduced in the sale certificate as per the request of her son. As stated supra, the auction purchasers remained undisclosed at the time of the disposal of W.P.No.15814 of 2002. In the meanwhile, the appellant filed an application in WPMP No.2747 of 2003 in W.P.No.15814 of 2002 seeking extension of time for making the payment of the balance amount. This application was allowed by the learned Judge on 10.02.2003 granting the appellant time till 25.03.2003 to comply with the undertaking given by it with regard to the payment of the balance amount. Pertinent to note, the learned Judge took note of the amounts already paid by the appellant towards its loan liability and the fact that the appellant claimed the balance amount due to be Rs.3.85 lakhs only. The learned Judge also adverted to the fact that the sixth respondent Bank, through its counsel, did not dispute the factum of the appellant having paid Rs.16.15 lakhs by 28.08.2002. Further, the sixth respondent Bank, through its counsel, undertook not to proceed with the sale of the property which was the subject matter of the writ petition till 25.03.2003. It is stated that on 11.02.2003, the counsel for the sixth respondent Bank filed an application in W.P.No.15814 of 2002 seeking modification of the order passed a day earlier. However, no orders seem to have been passed on the same. It appears that the sixth respondent Bank, for the first time, disclosed therein that the sale had already been conducted and confirmed; and that the sale certificate dated 10.02.2003 had been issued in favour of M.Virupakshi, respondent 2. However, no orders seem to have been passed on the same. It appears that the sixth respondent Bank, for the first time, disclosed therein that the sale had already been conducted and confirmed; and that the sale certificate dated 10.02.2003 had been issued in favour of M.Virupakshi, respondent 2. The appellant, claiming knowledge of the sale only from this date, approached the Tribunal challenging the sale certificate dated 10.02.2003 in CTA No.61 of 2003. By Judgment dated 22.11.2004, the Tribunal set aside the impugned sale certificate on the ground that several irregularities were committed by the sale officer, impleaded eo nomine as the fifth respondent herein, during the auction sale. Aggrieved thereby, respondents 1 and 2, the auction sale purchasers, filed Writ Petition No.1303 of 2005, which was allowed by the learned Judge by order dated 07.02.2005, whereby the Judgment of the Tribunal in CTA No.61 of 2003 was reversed, and the auction sale and consequently the sale certificate were upheld. Heard Sri M.S.Prasad, learned counsel for the appellant; Sri Vedula Venkataramana, learned senior counsel for respondents 1 and 2; the learned Government Pleader for Co-operation for respondents 4 and 7; Sri P.S.Rajasekhar, learned counsel for the sixth respondent Bank and Sri M.Damodar Reddy, learned counsel for the sale officer-respondent 5. Sri M.S.Prasad, learned counsel for the appellant, contended that the auction sale was conducted in flagrant violation of the statutory procedural norms prescribed under Rule 52 of the Rules of 1964. He asserted that the violation of these binding provisions vitiated the entire transaction, thereby invalidating the impugned sale and consequential sale certificate. The learned counsel pointed out that Rule 52(11)(e) of the Rules of 1964 posits a mandatory gap of 30 days between the date of proclamation and the date of auction sale, which was not maintained in the present case. He pointed out that Rule 52(11)(f) made it amply clear that where the sale was adjourned for a period longer than 7 days, a fresh proclamation under Rule 52(11)(e) had to be made. However, in the present case, notwithstanding the adjournment of the sale beyond a period of 7 days, it is pointed out that neither a sale proclamation under Rule 52(11)(e) was issued nor was the hiatus of 30 days maintained as required by the Rule. However, in the present case, notwithstanding the adjournment of the sale beyond a period of 7 days, it is pointed out that neither a sale proclamation under Rule 52(11)(e) was issued nor was the hiatus of 30 days maintained as required by the Rule. The learned counsel also pointed out that the notice dated 01.08.2002 did not stipulate the time and place of the auction as required in the Rule. He further pointed out that the notice dated 01.08.2002 was not issued by the District Registrar of the Co-operative Societies as required under Rule 52(11)(f) but was issued by the Sale Officer himself. The aforestated procedural violations, according to the learned counsel, render the auction sale invalid in law. On facts, the learned counsel submitted that there was any amount of doubt as to whether the auction purchasers had remitted the requisite Earnest Money Deposit (EMD) prior to the commencement of the auction. Further, the presence of 7 bidders is also doubted as there is no record of their participation. It is pointed out that there is no proof of any of these alleged bidders depositing the EMD. The learned counsel stated that the auction purchasers had produced the credit voucher dated 26.08.2002 in evidence of the deposit of the EMD, which was well after the auction sale on 24.08.2002. The learned counsel submitted that the auction purchasers had failed to deposit 15% of the bid amount by way of cash/demand draft on the date of the auction and that a cheque for the same had been accepted which was realized long thereafter on 14.09.2002. This, it is pointed out, is in clear violation of Rule 52(11)(g) of the Rules of 1964. In so far as the balance amount is concerned, the learned counsel adverted to Rule 52(11)(h) of the Rules of 1964 which requires the same to be paid within 15 days from the date of the auction sale. It is pointed out that in the present case, the balance 85% of the purchase money was paid and accepted only on 05.02.2003 in violation of the mandatory requirement of Rules 52(11)(h) and (i). The factual aspects in this regard are stressed upon by the learned counsel to support his contention that the entire transaction was sham and fraudulent. It is pointed out that in the present case, the balance 85% of the purchase money was paid and accepted only on 05.02.2003 in violation of the mandatory requirement of Rules 52(11)(h) and (i). The factual aspects in this regard are stressed upon by the learned counsel to support his contention that the entire transaction was sham and fraudulent. It is pointed out that the payment was also made on the basis of the loan obtained by the auction purchasers from the Central Bank of India which clearly indicates that they did not have the wherewithal to pay the amount within the time frame stipulated by the Rules. The learned counsel further stressed upon the conduct of the sixth respondent Bank during the course of the proceedings before this Court in the earlier round of litigation. He pointed out that the factum of the auction sale held on 24.08.2002 was deliberately suppressed and on the other hand, the sixth respondent Bank undertook before this Court on no less than two occasions that it would not proceed with the sale. The first such undertaking was given on 06.09.2002. Notwithstanding the same, the sale transaction was proceeded with as is evident from the correspondence placed on record and the events that occurred. The learned counsel therefore contended that the Tribunal had rightly held that the auction sale was vitiated by procedural irregularities and that the learned Judge ought not to have reversed the said finding. Sri Vedula Venkataramana, learned senior counsel for respondents 1 and 2, stated that the appellant had failed to apply to the Registrar to set aside the sale under Rule 52(14) (i) of the Rules of 1964 and was therefore estopped from challenging the sale certificate issued upon the confirmation of the sale. The learned senior counsel pointed out that the appellant had committed default in the payment of the loan amount in spite of ample opportunity and time being afforded to it and therefore could not seek any relief from this Court. He further contended that having assailed the sale notice dated 01.08.2002 in W.P.No.15814 of 2002 and having invited the final order dated 06.09.2002 therein, it was not open to the appellant to re-open its challenge to the said sale notice. He further contended that having assailed the sale notice dated 01.08.2002 in W.P.No.15814 of 2002 and having invited the final order dated 06.09.2002 therein, it was not open to the appellant to re-open its challenge to the said sale notice. He urged that in any event, the learned Judge had rightly held that the time gap of 30 days prescribed under the Rules of 1964 was applicable only to the initial notice and not to the notices issued after the adjournment of the sale under the first notice. He argued that the lapses, if any, on the part of the authorities in the conduct of the sale could not be permitted to visit any adversity upon his clients as they were bona fide purchasers in an auction sale. He pointed out that his clients had been residing in the subject property since the year 2003 and that equities would invariably weigh in their favour. All the more so, when the appellant admittedly committed default in repayment of the loan to the sixth respondent Bank inviting the consequential coercive action as per law in respect of the mortgaged property. The learned senior counsel urged that the procedural lapses, if any, did not cause any serious prejudice to the appellant warranting the invalidation of the auction sale at this late point of time. He accordingly prayed for dismissal of the appeal upholding the order of the learned Judge. Sri P.S.Rajasekhar, learned counsel representing the sixth respondent Bank, argued that the appellant, having committed default in the repayment of the loan and having suffered the Award under Section 61 of the Act of 1964, failed to deposit the amount payable despite ample opportunity being granted time and again. The learned counsel therefore supported the action taken in bringing to sale the subject house property belonging to the Proprietor of the appellant concern. The learned counsel also pointed out that the Arbitration Award dated 06.05.2000 in ARC No.81 of 2000-OSD had been substantially confirmed by the Tribunal in CTA No.239 of 2003 by Judgment dated 14.07.2004. The only modification of the Award was to the effect that the appellant should pay the reduced interest of 6% instead 21% upon the amount payable from the date of the Award till the date of realization. The only modification of the Award was to the effect that the appellant should pay the reduced interest of 6% instead 21% upon the amount payable from the date of the Award till the date of realization. The learned counsel stated that the Judgment of the Tribunal in CTA No.239 of 2003 was the subject matter of challenge in W.P.No.659 of 2005 which is still pending on the file of this Court. He therefore contended that in the light of the chronic default in repayment, the appellant could not be permitted to assail the coercive action initiated for recovery of the amount due, under Section 70 of the Act of 1964. Though the Sale Officer was impleaded eo nomine in the writ petition also, he did not choose to put in his appearance before the learned Judge. However, in this appeal the Sale Officer, being the fifth respondent herein, filed a counter claiming that he had not committed any irregularities in conducting the auction sale. He asserted that he had held the auction by duly following the procedure laid down by law. He assailed the findings of the Tribunal to the contrary, stating that no notice had been given to him before the Tribunal passed orders in CTA No.61 of 2003. The Sale Officer further contended that the appellant had failed to avail the remedies contemplated under Rule 52 of the Rules of 1964 and it had failed to establish any substantial injury caused to it by reason of any irregularity or mistake in the sale conducted by him. He denied that any irregularity had been committed by him in the receipt of the sale proceeds from the successful bidders in the auction sale. Sri M.Damodar Reddy, learned counsel representing the Sale Officer, reiterated the contents put forth in the said counter. Though multifarious and convoluted arguments were advanced at the bar by the learned counsel representing the contesting parties, we are not inclined to venture into the factual realm. We accordingly deem it unnecessary to decide as to whether respondents 1 and 2 had remitted the required EMD amount prior to the date of auction, whether 7 bidders participated in the said auction and whether respondent 2, being the mother of respondent 1 who allegedly participated in the auction along with his father, could have been introduced as the purchaser of the subject property in the impugned sale certificate. We also eschew from our consideration, the attack on the ground that the sale price procured in the auction was far lesser than the actual value of the property auctioned. We find that the matter is amenable to disposal on admitted facts as per legal principles and therefore, factual conundrums need not detain us. Notwithstanding the consistent attempts on the part of the respondents to stress upon the fact that the appellant was a chronic defaulter in so far as its loan repayment is concerned, we are of the opinion that the same assumes an insignificant role in so far as the validity of the auction sale is concerned. Under Section 70 of the Act of 1964, the Registrar of Co-operative Societies is empowered to recover the amounts due under an Arbitration Award passed under Section 61 by bringing to sale the property of the person who suffered such Award. However, a compendious procedure has been prescribed under Rule 52 of the Rules of 1964 for executing decrees, decisions or orders. These Rules are statutory in nature owing their origin to Section 130 of the Act of 1964. Therefore, the auction sale has to necessarily adhere to the procedural norms prescribed by these Rules, irrespective of the nature and extent of the default committed by the Judgment Debtor. The procedure set out under Rule 52(11) covers minutely the steps to be taken by the authorities at every stage while conducting the sale of the mortgaged property of the Judgment Debtor. “Rule 52 (11): In respect of an attachment and sale, or sale without attachment of immovable property, the following procedure shall be followed: (a) … (b) … (c) … (d) … (e) Proclamation of sale shall be published by affixing a notice at the office of the Registrar of the district and taluk office atleast thirty days before the date fixed for the sale and also beat of drum in the village on two consecutive days previous to the date of sale and on the day of sale. Such proclamation shall, where attachment is required before sale be made after the attachment has been affected. Notice shall also be given to the decree-holder and the defaulter. The proclamation shall state the time and place of sale and specify as fairly and accurately as possible. Such proclamation shall, where attachment is required before sale be made after the attachment has been affected. Notice shall also be given to the decree-holder and the defaulter. The proclamation shall state the time and place of sale and specify as fairly and accurately as possible. i) the property to be sold; ii) any encumbrance to which the property is liable; iii) the amount for the recovery of which sale is ordered; and iv) every other matter which the sale officer considers material for a purchaser to know in order to judge the nature and value of the property. (f) When any immovable property is sold under these rules, the sale shall be subject to the prior encumbrances on the property, if any. The decree-holder shall, when the amount for the realization of which the sale is held, exceeds one hundred rupees, furnish to the sale officer within such time as may be fixed by the sale officer or by the Registrar of the district, an encumbrance certificate from the Registration Department for a period of not less than twelve years prior to date of attachment of the property sought to be sold or in a case falling under the proviso to sub-rule (10), prior to the date of the application for execution. The time for production of the encumbrance certificate may be extended at discretion of the sale officer or the Registrar of the district, as the case may be. The sale shall be by public auction to the highest bidder, provided that it shall be open to the sale officer to decline to accept the highest bid where the price offered appears to be unduly low or for other reasons and provided also that the Registrar of the district or the sale officer may, in his discretion adjourn the sale to a specified day and hour, recording his reasons for such adjournment. Where a sale is so adjourned for a longer period than seven days a fresh proclamation under Clause (e) shall be made, unless the judgment-debtor consents to waive it. The sale shall be held after the expiry of not less than thirty days calculated from the date on which notice of the proclamation was affixed at the office of the Registrar of the district. The sale shall be held after the expiry of not less than thirty days calculated from the date on which notice of the proclamation was affixed at the office of the Registrar of the district. The time and place of sale shall be fixed by the Registrar of the district and the place of sale shall be the village or town where the property to be sold is situated or such adjoining prominent place of public resort as may be fixed by the said Registrar. Provided that in case where an encumbrance certificate is not obtainable owing to the destruction of the connected records, an affidavit from the village karnam in regard to the encumbrances known to him supported by a certificate from the Registration Department, that the encumbrance certificate cannot be granted owing to the destruction of the connected records, shall be accepted in the place of an encumbrance certificate. (g) A sum of money equal to fifteen per cent of the price of the immovable property shall be deposited by the purchaser with the sale officer at the time of the purchase, and in default of such deposit, the property shall forthwith be resold: Provided that where the decree-holder is the purchaser and is entitled to set off the purchase money under Clause (k), the sale officer shall dispense with the requirement of this rule. (h) The remainder of the purchase money and the amount required towards stamp fees for the certificate under Clause (v) of sub-rule (14) shall be paid within fifteen days from the date of sale: Provided that the time for payment of the stamp fees may, for good and sufficient reasons be extended at the discretion of the Registrar of the district upto thirty days from the date of sale: Provided further that in calculating the amounts to be paid under this clause, the purchaser shall have the advantage of any set off to which he may entitled under Clause (k) ; (i) In default of payment within the period mentioned in Clause (h) the deposit may, if the Registrar thinks fit after defraying the expenses of the sale, be forfeited to the Government and the property shall be resold and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold; (j) … (k) …” Rule 52(11)(e) speaks of the proclamation of the sale being published by affixation of the notice at the specified offices at least 30 days before the date fixed for the sale, in addition to other steps. As per this Rule, the proclamation shall state the time and place of sale along with the other specified details. We are not impressed by the argument advanced on behalf of the appellant that the Registrar and/or Deputy Registrar of the District alone are empowered to issue such proclamation. There is no such limitation prescribed under the Rule. Further, as specified in the Rule, it is for the Sale Officer to decide as to which other matter he considers material for a purchaser to know for inclusion in the proclamation. Therefore, the role played by the Sale Officer in the issuance of the proclamation, as is manifest from the Rule itself, clearly negates the argument that the Sale Officer has no power to issue the proclamation. However, we are unable to accept the contention advanced by the learned senior counsel for respondents 1 and 2 that the time stipulation prescribed in Rule 52(11)(e) is only applicable to the first proclamation and would not have any bearing in so far as the subsequent proclamations/sale notices are concerned. However, we are unable to accept the contention advanced by the learned senior counsel for respondents 1 and 2 that the time stipulation prescribed in Rule 52(11)(e) is only applicable to the first proclamation and would not have any bearing in so far as the subsequent proclamations/sale notices are concerned. In the present case, the established facts reflect that the two sale proclamations dated 07.07.2001 and 20.12.2001 maintained the required gap of 30 days before the proposed date of auction sale. However, the sale notices issued by the fifth respondent Sale Officer on 11.04.2002 and 01.08.2002 did not comply with this requirement. It is relevant to note that Rule 52(11)(f) specifically states that where a sale is adjourned for a longer period than 7 days, a fresh proclamation under clause (e) has to be made unless the Judgment Debtor consents to waive it. It further states that the sale shall be held after the expiry of not less than 30 days calculated from the date on which the notice of the proclamation is affixed at the office of the Registrar of the District. In the present case, the Sale Officer had issued the sale notice dated 11.04.2002 fixing the date of the auction sale as 24.04.2002 which did not materialize. Therefore, he issued the subject sale notice dated 01.08.2002 fixing the date of the auction sale on 24.08.2002. Clearly, the auction sale proposed to be held on 22.04.2002 was adjourned beyond a period of 7 days. Therefore, Rule 52(11)(f) required the issuance of a sale proclamation under Rule 52 (11)(e), as there was no waiver by the appellant. Admittedly, the sale notice dated 01.08.2002 does not comply with the requirements of a sale proclamation under Rule 52(11)(e). The learned Judge, while adverting to this point, was of the opinion that it would be difficult to expect compliance with such a Rule with the same rigour in relation to subsequent and deferred steps also. The learned Judge further stated that this course would hamper the very implementation of the provisions of the Act of 1964 and accordingly held that if the time gap is maintained in the initial proclamation it is not necessary or mandatory that the same time gap should be maintained at the subsequent stages. Reference was made in this context to postponed elections, deferred meetings, etc. Reference was made in this context to postponed elections, deferred meetings, etc. Having given thoughtful consideration to this aspect, we find ourselves unable to agree with the opinion expressed by the learned Judge. Once the Rule prescribes a procedure in no uncertain terms, indicating its mandatory nature by use of the words “the sale shall be held after the expiry of not less than thirty days….”, it is not for this Court to interdict the same on the ground that it would hamper implementation. If it had been the intention of the Rule Making Authority that the time to be maintained in the initial proclamation need not be followed in subsequent proclamations/sale notices, the same would have been indicated unequivocally. The specific intent of the Rule, manifest from the language used in Rules 52(11)(e) and (f), is that the hiatus of 30 days must necessarily be maintained between the date of the proclamation and the date of the auction sale. The reason for the same is not far to gather. Once there is a postponement of the proposed auction sale indefinitely or at least beyond a period of one week, it would again be necessary to bring it to the notice of the general public that such an auction is proposed, so that maximum participation of interested parties is assured. It may well be possible that persons who were unaware of the earlier proclamation may notice the subsequent proclamation and would necessarily have to make suitable financial arrangements so as to participate in the auction sale and meet the time stipulations fixed in the Rules with regard to the payment of the bid amount, if they emerge successful. Such a procedure not only benefits the Judgment Debtor but also the Decree Holder who would be assured of the best possible price for the property brought to sale, so as to cover his dues. Therefore, the analogy sought to be drawn by the learned Judge between such auction sales and postponed elections, deferred meetings, etc., does not stand to reason. In the case of postponed elections and deferred meetings, the affected group is identified and determined, be it the electorate or the members attending a meeting. Such is not the scenario in the case of an auction involving the general public. In the case of postponed elections and deferred meetings, the affected group is identified and determined, be it the electorate or the members attending a meeting. Such is not the scenario in the case of an auction involving the general public. Once there is an adjournment of the auction sale it would be necessary for the entire procedure to be initiated from scratch so that maximum participation in the auction bidding is ensured. That is the reason why the Rule posits a gap of 30 days so as to permit new interested parties to make their arrangements prior to participating in the auction sale. We are therefore of the opinion that every subsequent sale proclamation or sale notice, in the event of adjournment of the sale beyond a period of 7 days, must also comply with the requirement of maintaining a gap of 30 days before the date of auction sale as stipulated in Rules 52(11)(e) and (f). In this regard, the contention that the appellant, having already assailed the validity of the sale notice dated 01.08.2002 in W.P.No.15814 of 2002, cannot be permitted to raise the issue afresh in these proceedings cannot be countenanced. It is relevant to note that W.P.No.15814 of 2002 was not decided on merits and there is no finding rendered in the said writ petition on this aspect which could bring into play the principle of res judicata. The issue was neither argued nor finally decided in the said writ petition. The sheet anchor of the appellant’s attack against the auction sale and the consequent sale certificate is that the auction purchasers failed to comply with the mandatory requirements prescribed in Rules 52(11)(g) and (h) with regard to the deposit of the bid amount. It is an admitted fact that the auction purchasers remitted 15% of their bid amount, after adjusting the EMD, by way of a cheque which was only credited on 14.09.2002. The balance amount of the purchase money was paid only on 05.02.2003 by way of demand drafts. Further, instead of remitting the amount required towards the stamp fee for the sale certificate, the auction purchasers themselves purchased the stamp papers upon the advice of the Sale Officer. All these actions are stated to be in violation of the procedure prescribed under Rules 52(11)(g) and (h), thereby vitiating the sale transaction and consequently the sale certificate dated 10.02.2003. Further, instead of remitting the amount required towards the stamp fee for the sale certificate, the auction purchasers themselves purchased the stamp papers upon the advice of the Sale Officer. All these actions are stated to be in violation of the procedure prescribed under Rules 52(11)(g) and (h), thereby vitiating the sale transaction and consequently the sale certificate dated 10.02.2003. It is relevant to note that this procedure is in pari materia with the procedure prescribed in Order XXI, Rules 84 to 86 of the Code of Civil Procedure, 1908. The Supreme Court, while dealing with Order XXI, Rules 84 to 86 of the Code of Civil Procedure, 1908, in MANILAL MOHAN LAL SHAH v. SARDAR SYED AHMAD SYED MAHMAD AIR 1954 SC 349 held that these provisions leave no doubt that unless the deposit and the payment are made as required by the mandatory provisions of the Rules, there is no sale in the eye of law. It was observed: “11. …….. we are of opinion that the provisions of the rules requiring the deposit of 25 per cent of the purchase money immediately on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon non-compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a purchaser without depositing 25 per cent of the purchase money in the first instance and the balance within 15 days. When there is no-sale within the contemplation of these rules, there can be no question of material irregularly in the conduct of the sale. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired no rights at all.” The same view was taken by a Division Bench of this Court in MUDRAGADA SURYANARAYANAMURTHI v. SOUTHERN AGENCIES, RAJAHMUNDRY AIR 1962 AP 271 . We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired no rights at all.” The same view was taken by a Division Bench of this Court in MUDRAGADA SURYANARAYANAMURTHI v. SOUTHERN AGENCIES, RAJAHMUNDRY AIR 1962 AP 271 . It is relevant to note that in this case there was only a shortfall of Rs.9.00 in the amount to be paid towards stamp duty for the sale certificate and the sale consideration had been fully remitted as required. However, as the mandatory requirement of complying with the procedure prescribed in the Rule was violated, the Division Bench held that the time frame prescribed by Order XXI, Rule 85 of the Code of Civil Procedure, 1908 either for depositing the full amount of purchase money or full amount required for general stamp for the certificate could not be extended. Accordingly, the sale was held to be a “complete nullity” and was completely wiped out as if it did not exist in the eye of law. The Supreme Court reiterated its view again in BALRAM v. ILAM SINGH AIR 1996 SC 2781 , wherein it took note of the fact that in MANILAL MOHANLAL SHAH AIR 1954 SC 349 the argument that the failure to make the deposit was only a material irregularity in the sale, was expressly rejected and it was held that Rule 85 being mandatory, its noncompliance renders the sale proceedings a complete nullity requiring the executing Court to proceed under Rule 86 and that the property has to be re-sold unless the Judgment Debtor satisfies the decree by making the payment before the re-sale. The Supreme Court rejected the attempt made by the auction purchaser to throw the blame for the non-deposit within the time frame upon the executing Court and stated: “10. It is also to be noted that the duty to pay the full amount of purchase money within the prescribed period of 15 days from the date of sale of the property is cast on the purchaser by virtue of Rule 85 of Order XXI and therefore, the entire responsibility to make full compliance of the mandatory provision is his.” In M/S.SHILPA SHARES AND SECURITIES v. NATIONAL CO-OPERATIVE BANK LIMITED AIR 2007 SC 1874 the Supreme Court was dealing with an auction sale under the Maharashtra Co-operative Societies Act, 1960 and the Rules framed thereunder. Similar to the case on hand, Rule 107(11)(g) of the Maharashtra Rules required 15% of the price of the auctioned immovable property to be deposited by the auction purchaser at the time of the purchase and the remaining 85% within 15 days from the date of such sale. The Supreme Court, referring to MANILAL MOHANLAL SHAH AIR 1954 SC 349 and BALRAM AIR 1996 SC 2781 , reiterated that the obligation of the purchaser to deposit the full purchase money within time is a mandatory requirement and noncompliance of the rule rendered the sale a nullity and was not a mere irregularity. The Judgments aforestated leave no room for doubt that the procedure prescribed under Rules 52(11)(g) and (h) of the Rules of 1964 must be construed to be mandatory. The learned Judge did not deal with these aspects at all as is evident from the order under challenge. However, violation of the mandatory provisions of these Rules, as pointed out by the Supreme Court time and again and also by a Division Bench of this Court, would necessarily and inevitably have its consequences. The facts on hand establish that on 24.08.2002, the date of the subject auction sale, the auction purchasers remitted 15% of the amount after adjusting the EMD, by way of a personal cheque. The amount payable under this cheque was only realized on 14.09.2002. It cannot therefore, by any stretch of imagination, be said that the auction purchasers deposited the amount at the time of purchase as contemplated by Rule 52 (11)(g). Further, as per Rule 52(11)(h) the balance 85% of the purchase money along with the money required towards stamp fee for the sale certificate, had to be paid within 15 days from 24.08.2002, i.e., by 08.09.2002. It appears that the fifth respondent Sale Officer addressed letter dated 28.08.2002 to respondent 1 and others pointing out that the auction had been knocked down in their favour and that they have to pay the balance amount within 15 days. He therefore requested them to pay the balance amount and deposit non-judicial stamp papers of requisite value for issuance of sale confirmation certificate. In response thereto, respondent 1 addressed letter dated 07.09.2002 stating that he was sending cheque dated 06.09.2002 bearing No.NIL drawn on NIL Bank in favour of the Sale Officer for a sum of Rs.27.90 lakhs which included the stamp duty of Rs.1.55 lakhs. In response thereto, respondent 1 addressed letter dated 07.09.2002 stating that he was sending cheque dated 06.09.2002 bearing No.NIL drawn on NIL Bank in favour of the Sale Officer for a sum of Rs.27.90 lakhs which included the stamp duty of Rs.1.55 lakhs. A photocopy of the said typed letter is placed on record and indicates that therein, the date of the auction, which was originally typed as 28.08.2002, was thereafter corrected manually as 24.08.2002. Similarly, the cheque date was shown as 07.09.2002 and was again manually corrected as 06.09.2002. The said letter bears the endorsement of the Sale Officer to the effect that he had received the letter along with cheque bearing No.003702 dated 06.09.2002 for Rs.27.90 lakhs. Thereafter, the Sale Officer addressed letter dated 13.09.2002 to M.Krishna, respondent 1 and others, informing them that the sale confirmation certificate could not be issued due to the Order of the High Court in W.P.No.15814 of 2002. He informed the addressees that the High Court granted time to the owner to settle the loan account till the month of January, 2003. The Sale Officer further stated that it would be better for the addressees to purchase the stamp papers of requisite worth and produce the same for issuance of the sale confirmation certificate, which could be done only if the Judgment Debtor failed to settle his loan account in January, 2003. He accordingly asked the auction purchasers to wait till the month of January, 2003 for the issuance of the sale confirmation certificate. The Sale Officer then addressed letter dated 01.02.2003 to M.Krishna, respondent 1 and others, informing them that the owner of the auctioned property had failed to comply with the order of the High Court in W.P.No.15814 of 2002 and that he had taken over the possession of the property. He accordingly advised them to make arrangement for the balance amount of the purchase money in lieu of the cheque dated 07.09.2002. Relevant to note, there is a discrepancy as regards the date of the cheque. It appears that the balance purchase money of Rs.26.35 lakhs was deposited by way of 3 separate demand drafts dated 05.02.2003 issued by the Central Bank of India, Hyderabad, for the individual sums of Rs.9 lakhs, Rs.9 lakhs and Rs.8.35 lakhs. Relevant to note, there is a discrepancy as regards the date of the cheque. It appears that the balance purchase money of Rs.26.35 lakhs was deposited by way of 3 separate demand drafts dated 05.02.2003 issued by the Central Bank of India, Hyderabad, for the individual sums of Rs.9 lakhs, Rs.9 lakhs and Rs.8.35 lakhs. We do not propose to go into the issue as to whether the auction purchasers had the financial liquidity to make the necessary payment as they obtained financial aid from the Central Bank of India for making the said payment. The fact remains that the aforestated payments, be it the initial 15% or the balance of the purchase money, were not in accordance with the time stipulations mandated by Rules 52(11)(g) and (h). The defence put forth by the auction purchasers that the delay in the remittance of these amounts was occasioned owing to the orders passed by the High Court in W.P.No.15814 of 2002, does not hold water in the light of the observations of the Supreme Court in BALRAM AIR 1996 SC 2781 . It is relevant to note that though the auction sale is said to have been conducted on 24.08.2002 the same was not brought to the notice of this Court when the earlier case was disposed of on 06.09.2002. On the other hand, the learned counsel for the sixth respondent Bank undertook before this Court not to proceed with the sale. Similarly, when this Court thereafter extended the time granted to the appellant for making the payment by its order dated 10.02.2003, none of the respondents herein chose to inform this Court of the fact that the auction had already been conducted on 24.08.2002. Surprisingly, the auction purchasers having been apprised of this litigation, did not choose to take any steps either. Normally, a bona fide purchaser in an auction sale upon being informed of the intervention in the matter by a Court of law would immediately rush to put forth his case before the Court concerned for protection of his own interest. All the more so in this case, when the auction purchasers had already invested over Rs.4 lakhs in the transaction. All the more so in this case, when the auction purchasers had already invested over Rs.4 lakhs in the transaction. Further, once the statutory provisions mandated the remittance of amounts within a time frame, it would have been proper and fitting for the auction purchasers to comply with the said requirement and then approach this Court to apprise it of the developments so as to safeguard their investment. However, as stated earlier, the auction purchasers chose to remain mum about the events that had transpired whereby their interests were placed in jeopardy by the less than forthright actions of the fifth respondent Sale Officer and the sixth respondent Bank. Sri Vedula Venkataramana, learned senior counsel, drew our attention to the Judgment of the Supreme Court in RADHY SHYAM v. SHYAM BEHARI SINGH AIR 1971 SC 2337 , wherein the Supreme Court held: “8. … Mere proof of a material irregularity such as the one under Rule 69 and inadequacy of price realised in such a sale, in other words injury, is, therefore, not sufficient. What has to be established is there was not only inadequacy of the price but that inadequacy was caused by reason of the material irregularity or fraud. A connection has thus to be established between the inadequacy of the price and the material irregularity.” The learned senior counsel also placed reliance on a Division Bench Judgment of this Court in V.V.NARAYAN CHETTY v. NENLA DHANAMMA AIR 1984 AP 159 , in support of his contention that irregularities in the conduct of the auction sale did not warrant setting aside of the sale itself. In V.V.NARAYAN CHETTY AIR 1984 AP 159 , the Division Bench was dealing with a situation where the auction sale was attacked on the ground that the property had been sold at a lesser value. The Division Bench observed that the sale could not be set aside under Order XXI, Rule 90 of the Code of Civil Procedure, 1908 on such a ground unless it was proved that the property fetched a low price as a result of the fraud played, whereby the Judgment Debtor suffered substantial injury. The Division Bench observed that the sale could not be set aside under Order XXI, Rule 90 of the Code of Civil Procedure, 1908 on such a ground unless it was proved that the property fetched a low price as a result of the fraud played, whereby the Judgment Debtor suffered substantial injury. Reference was made to the Judgment of the Supreme Court in RADHY SHYAM AIR 1971 SC 2337 and the Division Bench held that it was not sufficient for the Judgment Debtor to prove an irregularity in the conduct of the sale and that he is further required to satisfy the Court that he has sustained substantial injury by reason of such irregularity or fraud. The above Judgments have no role to play in the factual matrix before us. As pointed out in MANILAL MOHAN LAL SHAH AIR 1954 SC 349 and reiterated thereafter time and again, an auction sale conducted in violation of the mandatory provisions is a complete nullity. Consequently, when there is no ‘sale’ within the contemplation of the Rules, there can be no question of any material irregularity in the conduct of such sale. In the present case, as the auction sale was conducted in blatant violation of the procedure prescribed under Rules 52(11)(g) and (h) of the Rules of 1964, there was no auction sale in the eye of law and as such the question does not arise as to whether there were any material irregularities in the course thereof warranting application of the aforestated Judgments. The learned senior counsel also contended that without availing the remedy provided under Rule 52 of the Rules of 1964, it was not open to the appellant to agitate the issue. Specific reference is made to the failure on the part of the appellant to seek setting aside of the sale under Rule 52(14) of the Rules of 1964. The learned senior counsel also contended that without availing the remedy provided under Rule 52 of the Rules of 1964, it was not open to the appellant to agitate the issue. Specific reference is made to the failure on the part of the appellant to seek setting aside of the sale under Rule 52(14) of the Rules of 1964. The provision reads as under: “Rule 52(14)(i): At any time within thirty days from the date of the sale of immovable property, the decree-holder or any person entitled to share in a rateable distribution of the assets or whose interests are affected by the sale, may apply to the Registrar of the district to set aside the sale on the ground of a material irregularity or mistake or fraud in publishing or conducting it: Provided that no sale shall be set aside on the ground of irregularity, mistake or fraud unless the Registrar is satisfied that the applicant has sustained substantial injury by reason of such irregularity, mistake or fraud.” The learned senior counsel placed reliance on the observations of the Supreme Court in RAFIQUE BIBI (D) BY L.Rs. v. SAYED WALIUDDIN (D) BY L.Rs. AIR 2003 SC 3789 to the effect that the Court would invalidate an order only if the right remedy is sought by the right person in the right proceedings and circumstances. It is pointed out that the appellant failed to avail the remedy under Rule 52(14) of the Rules of 1964 at the appropriate time and therefore the challenge to the auction sale before the Tribunal in CTA No.61 of 2003 was itself liable to be rejected. It is however to be noticed that this aspect was argued before the Tribunal by way of a preliminary objection and the Tribunal by its order dated 28.06.2003 held that it had jurisdiction to entertain the appeal under Section 76(1) of the Act of 1964 and overruled the objection. Aggrieved thereby, respondents 1 and 2 filed W.P.No.13773 of 2003 before this Court. By order dated 18.09.2003, a learned Judge of this Court held that merely because the Judgment Debtor failed to avail the remedy provided under Rule 52 (14) of the Rules of 1964, it did not debar him from availing the appellate remedy under Section 76(1) of the Act of 1964. By order dated 18.09.2003, a learned Judge of this Court held that merely because the Judgment Debtor failed to avail the remedy provided under Rule 52 (14) of the Rules of 1964, it did not debar him from availing the appellate remedy under Section 76(1) of the Act of 1964. The learned Judge accordingly expressed his disinclination to interfere with the decision of the Tribunal and dismissed the writ petition. We are informed that the said order has attained finality. In that view of the matter, it is not open to the respondents herein to once again raise the issue of maintainability of the appeal before the Tribunal or allege that the appellant should be denied relief on the ground that it did not avail the remedy under Rule 52(14) of the Rules of 1964 before initiating the present litigation. We accordingly hold that Rules 52(11)(e) and (f) of the Rules of 1964 mandate a gap of 30 days being maintained between the date of the sale proclamation or sale notice and the date of the auction sale. Such gap necessarily has to be maintained not only with regard to the first proclamation but also under every subsequent sale proclamation/sale notice issued due to the adjournment of the auction sale beyond a period of seven days. The requirement of the deposit of 15% of the sale price at the time of purchase and the remainder of the purchase money along with the amount required towards stamp fee within 15 days from the date of sale, as posited by Rules 52(11)(g) and (h) of the Rules of 1964 is mandatory and any violation of this mandate renders the sale a nullity in the eye of law. In the present case, the admitted facts establish that the deposit of the purchase money, be it the initial 15% or the balance, was not made in accordance with the time stipulations mandated by Rules 52(11)(g) and (h) of the Rules of 1964. Further, instead of depositing the amount required towards the stamp fee for the sale certificate as mandated by Rule 52(11)(h) of the Rules of 1964, it appears that respondent 2 herself purchased the requisite stamp papers in her own name and the sale certificate was issued thereupon. This also constitutes violation of the mandatory Rule, in the light of the law laid down by the Supreme Court and this Court. This also constitutes violation of the mandatory Rule, in the light of the law laid down by the Supreme Court and this Court. Such violations render the auction sale a nullity and consequently, the sale confirmation and the sale certificate which followed are equally invalid in the eye of law. The order of the learned Judge in W.P.No.1303 of 2005 is therefore set aside and the Judgment dated 22.11.2004 passed by the A.P. Co-operative Tribunal, Hyderabad, in CTA No.61 of 2003 is upheld. As a sequel, the auction sale conducted on 24.08.2002 and the consequential sale certificate dated 10.02.2003 are held to be illegal and void. A copy of this order shall be forwarded to the Sub-Registrar, Bowenpally, in whose office the sale certificate has been registered as Document No.272 of 2003, for effecting necessary cancellation thereof in his records as provided under Section 31(2) of the Specific Relief Act, 1963. As the appellant continues to be bound by the Award dated 06.05.2000 in ARC No.81 of 2000, whereby it was required to pay to the sixth respondent bank a sum of Rs.27,24,810/- along with interest at 21% per annum till the date of the Award and at 6% per annum from the date of the Award till the date of realization, subject to the final orders in W.P.No.659 of 2005, there shall be a direction to the sixth respondent Bank to compute the amount payable by the appellant till date, deduct the amounts already paid and call upon the appellant to remit the balance amount, if any, due. Upon such demand, the appellant shall remit the balance amount within two (2) months thereafter. In the event the appellant fails to remit the balance amount aforestated within the time stipulated, it shall be open to the sixth respondent Bank to initiate steps for re-sale of the subject property in accordance with law. As respondents 1 and 2 have been residing in the subject property for the past several years, it is just and equitable that they be granted sufficient time for making alternate arrangements. Accordingly, respondents 1 and 2 are granted six (6) months time to vacate the subject house property and hand over peaceful, vacant possession of the same to the owner, Shyam Prasad, the Proprietor of the appellant concern. Accordingly, respondents 1 and 2 are granted six (6) months time to vacate the subject house property and hand over peaceful, vacant possession of the same to the owner, Shyam Prasad, the Proprietor of the appellant concern. Respondents 1 and 2 shall also return to the owner the link title deeds in original available with them, pertaining to the subject property. As respondents 1 and 2 invested monies in the purchase of the subject auctioned property, which auction is now held to be invalid in law, they are entitled to refund of their monies with interest. The sixth respondent Bank shall remit the purchase money paid by respondents 1 and 2 along with the amount spent by them towards the stamp fee for the sale certificate with interest thereon at the rate of 12% per annum. The writ appeal is accordingly allowed. In the circumstances of the case, we make no order as to costs.