BINDU DILEEP vs STATE OF KERALA
- Court
- Kerala High Court
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE K. NATARAJAN
&
THE HONOURABLE MR. JUSTICE JOHNSON JOHN
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WEDNESDAY, THE 9 DAY OF SEPTEMBER 2026 / 18TH BHADRA, 1948
WA NO. 1169 OF 2026
JUDGMENT DATED 18.05.2026 IN WP(C) NO.6719 OF 2026 OF HIGH COURT OF
KERALA
APPELLANTS/PETITIONERS IN W.P.(C):-
1 BINDU DILEEP, AGED 56 YEARS, W/O. DILEEP KUMAR, NIRAPPEL
VEETTIL, VALLICHIRA P.O., MEENACHIL TALUK, KOTTAYAM DISTRICT,
PIN – 686 574.
2 DILEEP KUMAR C., AGED 62 YEARS, S/O. RAMACHANDRAN,
NIRAPPELVEETTIL, VALLICHIRA P.O., MEENACHIL TALUK, KOTTAYAM
DISTRICT, PIN – 686 574.
BY ADVS.
SRI.GEORGE MATHEW
SHRI.SUNIL KUMAR A.G
SHRI.MATHEW K.T.
SHRI.GEORGE K.V.
SHRI.NAVEEN N. ROBINSON
SHRI.ADITHYA BENZEER
SMT.MEDHA B.S.
SHRI.JOHN ZACHARIAH DOMINIC
RESPONDENTS/RESPONDENTS IN W.P.(C):
1 STATE OF KERALA, REPRESENTED BY ITS SECRETARY, DEPARTMENT OF
CO-OPERATION, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM,
PIN – 695 001.
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2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES, JAWAHAR SAHAKARANA
BHAVAN, DPI JUNCTION, THYCAUD. P.O., THIRUVANANTHAPURAM,
PIN – 695 014.
3 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G)
COLLECTORATE BUILDING, KOTTAYAM-KUMILY ROAD, KOTTAYAM
DISTRICT, PIN – 686 002.
4 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (G)
OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES
(G), MEENACHIL TALUK, PALA P.O., KOTTAYAM DISTRICT, PIN – 686
575.
5 THE SPECIAL SALE OFFICER & INSPECTOR OF CO-OPERATIVE
SOCIETIES,
KIZHATHADIYOOR SERVICE CO-OPERATIVE BANK LTD. NO. 1995,
OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES
(G), MEENACHIL TALUK, PALA P.O., KOTTAYAM DISTRICT, PIN – 686
575.
6 KIZHATHADIYOOR SERVICE CO-OPERATIVE BANK LTD. NO.1995, PALA
P.O., REPRESENTED BY ITS SECRETARY, MEENACHIL TALUK, KOTTAYAM
DISTRICT, PIN – 686 575.
7 THE SECRETARY, KIZHATHADIYOOR SERVICE CO-OPERATIVE BANK
LTD. NO. 1995, PALA P.O., MEENACHIL TALUK, KOTTAYAM DISTRICT,
PIN – 686 575.
8 ANISH M.J., S/O. M.J. JOSEPH, AGED 47 YEARS, MADAPPATTU HOUSE,
PALA P.O., MEENACHIL TALUK, KOTTAYAM DISTRICT, PIN – 686 575.
BY ADVS.
SRI.JAI GEORGE
R8 BY SMT.DAISY A.PHILIPOSE
SHRI.DARSHAN A.D.
R1 to R5 BY SRI. SANEEJ E.S., GOVERNMENT PLEADER
R6 & R7 BY SRI. P.C. SASIDHARAN
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31.08.2026, THE COURT
ON 09.09.2026 DELIVERED THE FOLLOWING:
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‘CR’
K. NATARAJAN & JOHNSON JOHN, JJ.
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W.A No. 1169 of 2026
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Dated this the 9 day of September, 2026
JUDGMENT
Johnson John, J.
This intra-court appeal is filed by the petitioners in W.P.(C) No.
6719 of 2026 challenging the dismissal of the writ petition by the
learned single Judge as per judgment dated 18.05.2026.
2. Heard Sri. George Mathew, the learned counsel for the
appellants, Sri. Saneej E.S., the learned Government Pleader for
respondents 1 to 5, Sri. P.C. Sasidharan, the learned Standing Counsel
for respondents 6 and 7 and Smt. Daisy Philipose, the learned counsel
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for the 8 respondent.
Factual Background:
3. In connection with two separate loans availed by the appellants
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from the 6 respondent Service Co-operative Bank in the year 2013,
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the Bank initiated arbitration proceedings under Section 69 of the Kerala
Co-operative Societies Act, 1969 (‘Act, 1969’ for short) as ARC Nos. 150
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and 151 of 2014. As per Exhibit P1 award dated 19.11.2014, the 6
respondent Bank is allowed to recover the balance amount of
Rs.20,01,029/- (Rupees Twenty Lakhs One Thousand and Twenty Nine
only) as follows:-
(i) 15% interest on the principal amount of Rs.15,86,220/- from
27.03.2013 to 27.03.2014
(ii) 15% interest plus 2% penal interest from 28.03.2014 to the
date of the plaint (20/06/2014)
(iii) 15% interest from the date of the plaint until realization, along
with future costs
As per Exhibit P2 award dated 19.11.2014, the Bank is allowed to
recover Rs.21,77,298/- (Rupees Twenty One Lakhs Seventy Seven
Thousand Two Hundred and Ninety Eight only) along with future
interest and costs, from the defendants/appellants herein and all their
movable and immovable properties as follows:
(i) 15% interest on the principal of Rs.17,50,000/- from March 27,
2013 to March 27, 2018
(ii) 15% interest plus 2% penal interest from March 28, 2014 to
the date of the plaint (June 20, 2014)
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(iii) 15% interest from the date of the plaint until the final
realization/recovery
4. The appellants also filed two revision petitions about 10 years
after the above awards before the Kerala Co-operative Tribunal alleging
that they have not received summons in the arbitration proceedings.
But, the Tribunal found no reason to entertain the revision petitions
owing to the inordinate delay.
5. Thereafter, the appellants filed W.P.(C) No. 33019 of 2024
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against the award in ARC No. 150 of 2014 and in the meantime, the 8
respondent purchased the properties in the auction conducted on
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30.01.2024. The 8 respondent filed W.P.(C) No. 39576 of 2024
against the inordinate delay in confirming the auction sale and
registration of the sale deed in his favour.
6. The appellants filed another writ petition as W.P.(C) No. 26659
of 2025 challenging the award in ARC No. 151 of 2014. As per Exhibit
P12 common judgment dated 06.08.2025, the two writ petitions filed by
the appellants herein as W.P.(C) Nos. 33019 of 2024 and 26659 of 2025
were dismissed on the ground that the maxim ‘ vigilantibus non
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dormientibus jura subveniunt’ squarely applies to the conduct of the
appellants.
7. As per the said common judgment dated 06.08.2025, W.P.(C)
No. 39576 of 2024 filed by the auction purchaser was disposed of
directing respondents 1 to 3 to complete the process of registration of
sale deed and delivery of possession of property to the auction
purchaser. Even though the appellants herein field review petitions
against the said common judgment, the same were dismissed as per the
order dated 21.10.2025.
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8. Subsequently, the auction sale in favour of the 8 respondent
herein was confirmed as per order dated 30.08.2025 and against the
same, the appellants herein filed W.P.(C) No. 367 of 2025 and as per
judgment dated 23.10.2025, the said writ petition was disposed of with
liberty to the appellants to file appeal under Section 83(1)(j) of the Act,
1969 and also directed to maintain status quo till the disposal of the
appeal.
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9. In W.A. No. 2742 of 2025 filed by the 8 respondent against the
said judgment, the Division Bench vacated the order of status quo on
the ground that if at all any such relief is to be granted, the same shall
be considered by the appellate authority. Subsequently, the appellate
authority dismissed the appeal as per Exhibit P20 order dated
09.02.2026. Thereafter, the present writ petition — W.P.(C) No. 6719 of
2026 was filed to set aside the sale and the order confirming the sale on
the ground of material irregularity and fraud.
Arguments A dvanced:
10. The learned counsel for the appellants argued that the reserve
price fixed is too low compared to the market value prevailing in the
locality and the auction purchaser also failed to deposit the balance sale
amount within the specified time. There was no sufficient notice and the
learned single Judge ought to have taken note of the illegality committed
in fixing upset price, issuing notice and conducting sale. It is also argued
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that two items of properties were sold at a price as desired by the 8
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respondent auction purchaser for a paltry sum and that respondents 1 to
6 failed to verify the entire aspects before passing the order confirming
the sale.
11. The learned counsel for respondents 6 and 7 argued that the
sale was conducted on 30.01.2024 after complying with all the
procedural formalities and the sale was confirmed on 30.08.2025. It is
argued that admittedly, the appellants have not filed any application to
set aside the sale under Rule 82 or 83 of the Kerala Co-operative
Societies Rules, 1969 (‘Rules, 1969’ for short) within the time limit and
Exhibit P16 appeal filed under Section 83(1)(j) of the Act, 1969 against
the order confirming the sale is not legally sustainable in the absence of
any application to set aside the sale within the prescribed period.
12. It is also argued that the appellants did not file objections at
the time of settlement of sale proclamation or at the time of conducting
the auction. It is pointed out that there was no objection from the side of
the appellants that the properties are far more valuable or that only a
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part of the property is required to be auctioned and it is an admitted fact
that at various stages of the execution proceedings, the appellants failed
to do what was required to be done and therefore, considering the
deliberate inaction on the part of the appellants, the appeal is liable to
be dismissed.
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13. The learned counsel for the 8 respondent—auction purchaser
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argued that the 8 respondent is a bona fide purchaser for value in
auction sale and that the property purchased by a third party auction
purchaser is to be treated differently from a decree holder purchasing
such properties. It is further argued that the third party auction
purchaser’s interest in the auctioned property continues to be protected,
notwithstanding that underlying decree is subsequently set aside or
otherwise, inasmuch as he is not connected with the decree.
14. The learned Government Pleader appearing for respondents 1
to 5 supported the contentions of respondents 6 to 8 by pointing out
that a mere statement that fraud has been played is not enough and
that when fraud is alleged, the party making the allegation must place
on record precise and specific details of the said allegation and there is
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no such specific averments either in the writ petition or in the statutory
appeal filed under Section 83(1)(j) of the Act, 1969.
15. The points that arise for consideration are the following:-
1. Whether the appellants have succeeded in establishing
sufficient grounds to set aside the sale?
2. Is there any justifiable grounds to interfere with the findings in
the impugned judgment ?
Points:
16. There is significant difference between material irregularity
and fraud in the context of auction sale. Material irregularity refers to a
significant procedural error or mistake or failure to follow the rules in
connection with the publication or conduct of the auction sale. But, fraud
involves intentional deception, collusion or dishonesty designed to cheat
a party with the design of securing some unfair or undeserved benefit
and therefore, when fraud is committed, one gains at the loss of
another.
17. Rule 74 of the Rules, 1969 provides the procedure for
execution of an arbitration award. As per Rule 81(a), an application
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under sub-rule (2) of Rule 74 shall contain the description of the
immovable property and as per Rule 81(b), the demand notice issued
under sub-rule (3) of Rule 74 shall contain the name of the defaulter,
the amount due, including the expenses and the said notice is also
required to be served on the defaulter. Rule 81(e) provides the
procedure for publication of the proclamation of sale and the same reads
thus:
“81. Procedure in attachment and sale of immovable property:-In the
attachment and sale or sale without attachment of immovable
property, the following rules shall be observed:--
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(e) Proclamation of sale shall be published by affixing a notice in the
offices of the Registrar, the Tahsildar and of the society concerned, at least
thirty days before the date fixed for the sale and also by the beat of Tom-tom
in the village on 2 consecutive days previous to the date of sale and on the
date of sale prior to the commencement of the sale [if found necessary under
unavoidable circumstances]. Such proclamation shall, where attachment is
required before sale, be made after the attachment has been effected. Notice
shall also be given to the decree-holder and the defaulter. It shall specify the
date, 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
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matter which the sale officer considers material for a purchaser to know in
order to Judge the nature and value of the property.”
18. Rule 82 enables any person, either owning such property or
holding an interest, to have the sale set aside on deposit and Rule 83
provides for filing application to set aside sale on the ground of
irregularity or fraud at any time within thirty days from the date of sale
of the property.
19. In this case, Exhibits P1 and P2 awards are dated 19.11.2014
and the auction sale was conducted on 30.01.2024. Admittedly, the
appellants have not filed any objection to the notice or sale proclamation
and they have also not filed any application under Rule 82 or Rule 83 of
the Rules, 1969 to set aside the sale. Exhibit P16 appeal under Section
83(1)(j) of the Act, 1969 against the order confirming the sale was filed
only on 28.10.2025. In the common judgment dated 06.08.2025 in W.P.
(C) Nos. 33019, 39576 of 2024 and 26659 of 2025, the learned single
Judge found that the writ petitions filed by the judgment debtors
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(appellants herein) smack of calculated delay and that they are not
entitled to revive the cause of action by preferring a writ petition.
20. In the said common judgment, there was also a direction to
complete the process of sale which had been initiated and delivery of the
possession of the property to the auction purchaser. The subsequent
review petitions filed by the appellants herein against the common
judgment were also dismissed.
21. In paragraphs 9 and 10 of the impugned judgment, it is found
that W.P.(C) Nos. 33019 of 2024 and 26659 of 2025 were filed after the
sale was conducted on 30.01.2024, without raising any challenge to the
sale proceedings and that the failure of the appellants herein to raise
any challenge to the sale which took place on 30.01.2024 in the previous
writ petitions filed on 17.07.2024 and 13.09.2024 respectively,
disentitles them from raising any contention in the present writ petition
challenging the sale.
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22. In paragraph 11 of the impugned judgment, it is found that
the writ petitioners are not entitled to any relief in exercise of
discretionary jurisdiction under Article 226 of the Constitution of India, in
as much as the petitioners have slept over their rights for a
considerable time and did not even avail the opportunity to have the sale
set aside on deposit and that they have approached the court only with
the intention of delaying the proceedings further.
23. A perusal of Exhibit P10 auction diary would show that the fair
value of the property was obtained from the Village Office and the
bidding commenced at the total due amount of Rs.94,20,723/- and since
no bidder was willing to accept the property at this amount, the bidding
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continued from the fair value of the property and the 8 respondent–-
Anish M.J., was the highest bidder for Rs.75,00,000/-.
24. Order XXI Rule 90 is the corresponding provision in the Civil
Procedure Code to set aside sale on the ground of irregularity or fraud.
Order XXI Rule 90(3) provides that no application to set aside sale under
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the said Rule shall be entertained upon any ground which the applicant
could have taken on or before the date on which the proclamation of sale
was drawn up.
25. As noticed earlier, in this case, the appellants have no case
that they filed any objection at any stage of the auction proceedings
before the confirmation of the sale and therefore, we find that the
principles under Order XXI Rule 90(3) of the CPC are applicable to a
property sold in auction in an application for execution of an award
under Rule 74 of the Rules, 1969. The Honourable Supreme Court in
Jagan Singh & Co. v. Ludhiana Improvement Trust [(2024) 3 SCC
308 ] , held thus in paragraphs 35 and 36:
35. It is a fact that in the various stages of execution proceedings what was
required to be done by the respondent Trust was never done. It is not one
single failure. In the execution petition itself the amount to be realised and the
value of the property were both mentioned. There was no objection by the
respondent Trust that the property was far more valuable and, thus, only a part
of the property should be sold. If one may say, the respondent Trust would
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have saved the day even at that time by depositing the amount due to the
owners. It did not do so.
36. The fact that ultimately the property fetched a larger price cannot be held
against the appellant who participated in the process and offered the
appropriate price, which was accepted. The respondent Trust did not even
comply with the requirement of Order 21 Rule 89 by depositing the decretal
amount along with 5% of the auction amount. The respondent Trust behaved
as if it had some superior right to appropriate the property of the owners
without paying for it contrary to the mandate of the LA Act. That would be
hardly called a case of fraud in such a situation.”
26. In Sadashiv Prasad Singh v. Harendar Singh [(2015) 5
SCC 574], it was held that a bona fide purchaser for value in an auction
sale is treated differently than a decree holder purchasing such
properties and that the property purchased by a third party auction
purchaser, in compliance with a court order, cannot be interfered with on
the basis of the success or failure of parties, if the auction purchaser had
bona fide purchased the property.
27. In Sanjay Sharma v. Kotak Mahindra Bank Ltd. [2025 KHC
OnLine 7019], the Honourable Supreme Court held that a sale by way of
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public auction, already confirmed or concluded, ought not to be set aside
or interfered with lightly except on grounds that go to the core of such
sale process and that mere irregularity or deviation from a rule that does
not have any fundamental procedural error cannot be accepted as a
ground to set aside the sale. Therefore, we find that the contention of
the appellants that sale is to be set aside on the ground of material
irregularity, is not legally sustainable, especially in view of the fact that
the appellants have not filed any objection during various stages of the
execution proceedings initiated under Rule 74 of the Rules, 1969 and
that the statutory appeal against the confirmation of sale conducted on
30.01.2024 was filed under Section 83(1)(j) of the Act, 1969 only on
28.10.2025.
28. The learned counsel for the appellants cited the decision of
the Honourable Supreme Court in Om Sakthi Sekar v. V. Sukumar
[(2026) 265 Comp Cas 689=2026 SCC OnLine SC 368] and argued that
when fraud is committed and thereby, competitive bidding is curtailed or
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compromised, the High Court can exercise the jurisdiction under Article
226 of the Constitution of India to set aside the sale, even after the
expiry of the time limit in the statute for filing application to set aside
the sale.
29. It is true that the principle of ‘finality of litigation’ cannot be
stretched to the extent of an absurdity that it can be utilized as an
engine of oppression by dishonest and fraudulent litigants and it is also a
well settled principle of law that a judgment, decree or order obtained by
playing fraud on the court, Tribunal or authority is a nullity and non est
in the eye of law. However, it is also well settled that fraud cannot be
established without proper pleadings and evidence. In Bishundeo
Narain v. Seogeni Rai and Jagernath [AIR 1951 SC 280 =1951 KLT
OnLine 814 (SC)], the Honourable Supreme Court held as under:
“25. ... Now if there is one rule which is better established than any other, it is
that in cases of fraud, undue influence and coercion, the parties pleading it must
set forth full particulars and the case can only be decided on the particulars as
laid. There can be no departure from them in evidence. General allegations are
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insufficient even to amount to an averment of fraud of which any court ought to
take notice, however strong the language in which they are couched may be and
the same applies to undue influence and coercion. See O. 6, R. 4, Civil
Procedure Code”
30. It is well settled that a litigant who prefers allegation of fraud
must place on record precise and specific details of the said allegations
and on a careful perusal of the averments in Exhibit P16 statutory appeal
and in the writ petition, we find that the appellants have raised
allegations of fraud without precise and specific details and therefore, we
find that this appeal is devoid of merit and is liable to be dismissed. The
points are answered against the appellants.
In the result, this appeal is dismissed. No costs.
sd/-
K. NATARAJAN,
JUDGE.
sd/-
JOHNSON JOHN,
JUDGE.
Rv