Karnataka High CourtAbbubakar Beary vs Assistant Registrar Of Co-Operative ... on 29 May, 1985Equivalent citations: ILR1987KAR35, 1986(1)KARLJ316ORDER
 

Rama Jois, J.1. The petitioner has presented this petition questioning the legality of the order made by the Assistant Registrar of Cooperative Societies and Recovery Officer, Puttur Sub-Division, Puttur, setting aside the auction of the property purchased by the petitioner and also directing re-sale of the same property.2.   The facts of the case in brief are as follows :The 2nd respondent-Belthangadi Taluk Co-operative Land Development Bank Limited had obtained an award against the father of the 3rd-respondent in respect of money due from him to the Bank. The immovable property namely 2 acres and 71 guntas of wet Sand belonging to the judgment-debtor was put up for sale on 14-5-1979. The petitioner was the highest bidder. His bid for Rs. 2,000/- was accepted. According to the terms of the auction, the petitioner deposited a sum of Rs. 300/- with the Recovery Officer on the date of auction. He also remitted the balance of the purchase money, of RS. 1700/- on 28-5-1979 i.e., within 15 days as required under Rule 38(2)(i) of the Karnataka Co-operative Societies Rules, 1960 (the Rules for short). He,
however, failed to deposit a sum of Rs. 140/- for the purchase of stamp paper required for executing the sale deed within the time allowed. He, however, deposited that amount on 6-2-1980 i.e. after a delay of about 7 months. By the impugned order dated 21-3-1980 (Annexure-A), the Assistant Registrar set aside the auction sale and directed re sale of the property. Aggrieved by the said order, the petitioner has presented this Petition.3. The contention of the petitioner is that the only power available for setting-aside the sale was under Sub-rule (5) of Rule 38 of the Rules, but under the said Rule, non depositing of the amount required for the purchase of stamp paper could not be a ground for setting-aside the sale. It is also the contention of the petitioner that under Rule 38(2)(j) of the Rules, on which the Assistant Registrar relied for cancelling the sale, did not confer any power for cancelling the sale and directing re-sale.4. Sri B. J. Somayaji, learned High Court Government Pleader, appearing for the Assistant Registrar, however, submitted that in view of the maximum period fixed for depositing the purchase money as also the amount required for the purchase of general stamp paper under Rule 38(2)(i) of the Rules, the failure to deposit any of the two amounts within the time permitted by the said Rule constitutes the ground for setting-aside the sale, and that Rule 38(2)(j) clearly implies that the Recovery Officer has to cancel the sale if the auction purchaser fails to deposit either the balance of the purchase money or the amount required for purchase of stamp paper within the time allowed by the Rule.5. In order to appreciate the rival contentions, it is necessary to set-out the provisions of Rule 38(2)(i) and (j) and Rule 38(2)(5a). They read :XXX XXX                                       XXXi) The remainder of the purchase money and the amount required for the general stamp for the sale certificate shall be paid within 15 days from the date of sale :Provided that the time for payment of the cost of the stamp may for good and sufficient reasons, be extended at the discretion of the Recovery Officer up to 30 days from the date of sale :Provided further that in calculating the amounts to be paid under this clauses, the purchaser shall have the advantage of any set off to which he may be entitled under Clause (1).j)   In default of payment of the remainder of the purchase money, within the period mentioned in Clause (i) the deposit, may, if the Recovery Officer thinks fit, after defraying the expenses of the sale, be forfeited to the Government 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 ; and
 

5(a) : At any time within 30 days from the date of the sale of an immoveable 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 Recovery Officer 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 or mistake or fraud unless the said Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of such irregularity, mistake or fraud.Rule 38(2)(i) is dear. The auction-purchaser has to deposit the balance of the purchase money as also the amount required for the purchase of general stamp paper necessary for the issue of sale certificate within 15 days from the date of sale. There is no power given to any one to extend the time for depositing the balance of the purchase money. The first proviso to Rule 38(2)(i), however, confers power on the Recovery Officer to extend the time for depositing the amount required for the purchase of stamp paper up to 30 
days from the   date of sale.   Thus, the maximum period available for depositing the balance of the purchase money and for depositing the   cost of stamp paper is 15 days and 30 days, respectively.Rule 38(2)(j) provides that if the purchaser commits default in depositing the purchase money within the time allowed by Clause (i), the defaulting purchaser not only forfeits all claims to the property but also becomes liable for the loss occasioned by the subsequent sale. Rule 38(2)(j) therefore clearly contemplates a subsequent sale of the property. A subsequent sale can be only after setting aside the earlier sale. Therefore, the clear implication of the rule is that if a purchaser fails to deposit the purchase money within the time allowed by the Rule the Recovery Officer has the power to put the property for re-sale after setting aside the sale.6. It is true, Rule 38 (2)(j) speaks of the depositing of the remainder of the purchase money within the period mentioned in Clause (i) and there is no reference to the depositing of the cost of stamp paper. But this sub-rule has to be read harmoniously with Sub-rule (i) which fixes the maximum period for depositing the amount required for the purchase of stamp paper. The expression 'payment of the remainder of the purchase money' used in Clause (j) therefore must necessarily include the amounts required to be deposited under Sub-rule (i). Therefore, in my view, in the event of the failure to deposit either of the two amounts specified in Rule 38(2)(i) within the time allowed under that Rule, the Recovery Officer gets the power to direct re-sale and also to recover the loss caused on account of re-sale, from the earlier purchaser.7. Clause (5) of Sub-rule (2) of Rule 38 of the Rules, however, is entirely different. It provides a remedy to the judgment-debtor for getting the sale set aside on grounds of 
material irregularities in conducting the sale or mistake or fraud in publishing or conducting it. Therefore, that Clause has no application to the case of this type.8.    In the result, I make the following :ORDER
 

Rule discharged.   Petition is dismissed.   No costs.