[Cites 2, Cited by 0]
Bombay High Court
Darshan Premchand Singh vs State Of Maharashtra Thr Its Principal ... on 28 November, 2025
Author: Amit Borkar
Bench: Amit Borkar
2025:BHC-AS:51899
907-45-wp-13463-2025 with connected.doc
Shabnoor
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 13463 OF 2025
GS Mahanagar Cooperative Bank Ltd. ... Petitioner
SHABNOOR
AYUB V/s.
PATHAN
Digitally signed by
The State of Maharashtra & Ors. ... Respondents
SHABNOOR AYUB
PATHAN
Date: 2025.11.28
16:07:23 +0530
WITH
WRIT PETITION NO. 13525 OF 2025
Darshan Premchand Singh ... Petitioner
V/s.
The State of Maharashtra & Ors. ... Respondents
Mr. Sanjiv Punalekar a/w Ms. Deepika, Paswan, for the
Petitioner in WP/13463/2025 and for Respondent No.4
in WP/13525/2025.
Mr. Sunit Kothari a/w Mr. Dhawal Giri, for the
Petitioner in WP/13525/2025.
Ms. V. S. Nimbalkar, AGP, for the State - Respondent
Nos.1 to 3 in WP/13463/2025.
Ms. Savina R. Crasto, AGP, for the State - Respondent
Nos.1 to 3 in WP/13525/2025.
Mr. Khushnood Akhatar i/b Mr. Shivaji Nirmale, for
Respondent No.5 in WP/13463/2025.
Mr. Prashant P. Kulkarni a/w Ms. Ritika Rajeev, for
Respondent No.7 in WP/13463/2025.
CORAM : AMIT BORKAR, J.
DATED : NOVEMBER 28, 2025
ORAL JUDGMENT:
1. Rule. Rule made returnable forthwith.
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2. Both petitions arise from a common grievance. The auction
purchaser challenges the order of the Revisional Authority. The
Revisional Authority set aside the auction in a revision filed by the
borrower. The borrower had questioned the conduct of the
auction, including the action of the Recovery Officer in locking the
premises. The borrower had also sought a direction for deciding
the objections filed under sub-rule 19 of Rule 107 of the
Maharashtra Cooperative Societies Rules, 1961.
3. The material facts are as follows. The Registrar issued a
recovery certificate under Section 101 of the Maharashtra
Cooperative Societies Act, 1960 against the borrower in the year
2017. On 26 December 2024, the borrower submitted a proposal
for One Time Settlement. The Bank accepted it with a condition
that the borrower must deposit twenty-five percent of the amount
on or before 31 January 2025 and pay the balance in eleven
monthly instalments. The borrower did not deposit the amount of
Rupees 2,65,10,246 by 31 January 2025. The Bank therefore
informed the borrower on 7 February 2025 that the OTS stood
cancelled on account of breach of the condition.
4. On 8 April 2025, the District Deputy Registrar fixed the upset
price for the auction. The auction purchaser complied with clauses
G and H of sub-rule 11 of Rule 107 of the MCS Rules. By order
dated 24 July 2025, the District Deputy Registrar stayed the
auction process. The Bank then filed Writ Petition No. 10807 of
2025. The Division Bench, by order dated 6 August 2025,
permitted the borrower to deposit Rupees 69 lakh within two days.
The Division Bench allowed the auction to proceed but directed
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that the sale shall not be confirmed till a decision is taken in the
pending revision before the District Deputy Registrar.
5. The borrower deposited Rupees 69 lakh. Relying on this
deposit, the Revisional Authority held that the Bank had not
complied with the OTS proposal. It concluded that the auction was
not held in accordance with Rule 107 of the MCS Rules. It
therefore set aside the auction. The Bank and the auction
purchaser have filed these petitions.
6. Learned Advocate for the Bank and the auction purchaser
submitted that the revision itself was not maintainable having
regard to the nature of reliefs sought. They submitted that
acceptance of the OTS was conditional. The borrower was required
to deposit twenty-five percent of the amount by 31 January 2025.
Clause 6 of the sanction letter of the OTS sets out the consequence
of default. The clause states that if the borrower fails to deposit the
amount by 31 January 2025, the Bank is free to proceed with the
auction of the secured property. It was submitted that the borrower
had not fulfilled the mandatory conditions of the OTS. In such a
situation, the Revisional Authority could not have set aside the
auction.
7. The learned Advocate for the borrower opposed the
petitions. He submitted that the borrower complied with the order
of the Division Bench by depositing Rupees 69 lakh within two
days. He submitted that the borrower was entitled to the benefit of
that order. He argued that clause 1 of the OTS permitted the
borrower to deposit Rupees 69 lakh within two days from the
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order of this Court. According to him, this substantially complied
with the conditions imposed by the Bank. He submitted that the
Revisional Authority rightly allowed the revision. He prayed for
dismissal of the petitions.
8. I have heard the learned advocates and examined the record.
Certain facts stand admitted. Three recovery certificates under
Section 101 of the Maharashtra Cooperative Societies Act were
issued in 2017. On 2 January 2025, the Bank accepted the One
Time Settlement proposal of the borrower. The acceptance was
subject to clear conditions. Condition 1 required the borrower to
deposit twenty-five percent of the amount within one month. Only
on such deposit would the borrower earn the right to pay the
balance by eleven monthly instalments. Condition 1 also states in
plain words that if the borrower fails to deposit twenty-five
percent, the Bank will treat the borrower as having declined the
benefit of the OTS and the Bank will appropriate five percent of
the deposit towards the principal. Condition 6 reiterates that
twenty-five percent must be deposited on or before 31 January
2025. It further states that if the borrower defaults, the Bank will
proceed to sell the secured property through auction. These
conditions leave no scope for doubt. The borrower did not comply.
9. It is also admitted that the auction purchaser complied with
the mandatory requirements of Rule 107 of the Maharashtra
Cooperative Societies Rules. The purchaser deposited fifteen
percent and thereafter the balance eighty-five percent within the
stipulated time. The statutory scheme treats these requirements as
mandatory. The purchaser stands protected once he complies.
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10. The only plea pressed by the borrower relates to the alleged
improper fixation of upset price. This plea has no merit. The
borrower did not avail any legal remedy at the appropriate stage.
After the Bank terminated the OTS in view of the borrower's
default, and communicated this to him on 7 February 2025, the
legal position became clear. The borrower could have paid the
entire amount required under Rule 107 before the auction. He
could have exercised the right under sub-rule 13 of Rule 107 by
depositing the requisite amount within thirty days from the
auction. Both rights arise from statute. Both remain unexercised.
In these circumstances, the Revisional Authority had no basis to
rely on the deposit of Rupees 69 lakh made pursuant to the order
of the Division Bench. That deposit was not in furtherance of a
subsisting OTS. The OTS had already lapsed by operation of its
own terms. The Division Bench only ensured that the auction
proceeds, subject to the outcome of the revision. The Revisional
Authority could not treat that interim arrangement as reviving a
terminated OTS.
11. The order of the Division Bench did not determine the rights
of the parties. It only permitted a deposit and directed that the
auction shall not be confirmed till the revision is decided. Such an
order regulates the process. It does not confer any substantive
benefit nor does it breathe life into an OTS that stood terminated
due to non-compliance with Conditions 1 and 6.
12. The Revisional Authority could not have entertained a
challenge to the entire auction process in a revision under Section
154 of the Maharashtra Cooperative Societies Act, in the absence
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of challenge to quasi judicial order. The law is settled that a
revision lies only against a quasi judicial order. The conduct of an
auction as a whole cannot be examined in revision. The Revisional
Authority therefore acted beyond jurisdiction.
13. In view of the above discussion, the impugned order cannot
stand. It is liable to be quashed and set aside.
14. Hence, Rule is made absolute in terms of prayer clauses (a)
and (b).
15. Both the writ petitions are disposed of accordingly in above
terms.
16. Pending interlocutory application(s), if any, stand disposed
of.
17. No order as to costs.
(AMIT BORKAR, J.)
