Prakash vs State Of M.P.

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IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR

BEFORE
HON'BLE SHRI JUSTICE MILIND RAMESH PHADKE
th
ON THE 27 OF OCTOBER, 2026
WRIT PETITION No. 1978 of 2010
CNR No.: MPHC030065982010
PRAKASH
Versus
STATE OF M.P. AND OTHERS
Appearance:
Shri Shivam Kumar Kurchaniya - Advocate for the petitioner.
Shri Shiraz Qureshi - Govt. Advocate for the State.
Shri O.P. Mathur - Advocate for respondent No.2/Bank.
Shri Raghvendra Dixit - Advocate for respondent No.5.
ORDER
The present petition, under Article 226 of the Constitution of India,
has been filed by the petitioner seeking following reliefs:-
"7.1 That, the sale certificate Annexure P-1 issued in
favour of the respondent No.5 may kindly be quashed.
7.2 That, it is further prayed that the whole auction
proceeding initiated in respect of the land at the behest of
respondent No.5 may kindly be quashed.
7.3. That, any other relief to which under the facts anc
circumstances of the case this Hon'ble Court deems fit, may
also be granted.
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7.4 That, the cost of this petition be also awarded to

the petitioners."
The controversy in the present petition arises out of recovery
proceedings initiated by the District Cooperative Agricultural and Rural
Development Bank Maryadit, Shivpuri, in respect of a loan obtained by late
Bharsi Nai, father of the petitioner. The disputed agricultural land comprises
Survey No.389, ad-measuring 0.94 hectare, and Survey No.405, ad-
measuring 0.11 hectare, situated at Village Magrora, Tahsil Kolaras, District
Shivpuri, having a total area of 1.05 hectares.
The case of the petitioner is that his father had obtained a loan from the
respondent - Bank in the year 1988 for construction of a tube well and had
subsequently expired in the year 1993. It is contended that, after the death of
his father, the petitioner and the other legal heirs continued to cultivate the
disputed land and depend upon it for their livelihood. It is further contended
that neither he nor the other legal heirs were duly informed about the
outstanding loan amount or the proposed auction proceedings. It is also
contended that the land was auctioned without affording them a proper
opportunity to repay the outstanding dues and the sale certificate issued in
favour of respondent No.5 is, therefore, illegal and liable to be quashed.
The petitioner has also questioned the manner in which the auction
proceedings were conducted, particularly with reference to the notice dated
17.03.2007, issued in the name of the deceased borrower. It is his grievance
that the bank authorities proceeded with the auction without duly notifying
the legal representatives of the deceased borrower and without affording
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them an opportunity to protect their rights over the agricultural land. On

these grounds, the petitioner seeks quashment of the sale certificate dated
02.08.2007 and the entire auction proceedings.
Per contra, learned counsel for respondent No.2/Bank opposes the
petition and submits that the loan had admittedly been obtained by the
petitioner's father and the disputed land had been mortgaged as security for
repayment thereof. As the outstanding dues were not repaid, the Bank
initiated proceedings for recovery in accordance with the provisions of the
Madhya Pradesh Cooperative Agricultural and Rural Development Bank
Act, 1999. The land was put to auction on 16.05.2007, the sale was
confirmed on 11.07.2007 and the sale certificate was issued on 02.08.2007 in
favour of respondent No.5. Learned counsel further submits that the
petitioner has already pursued proceedings challenging the auction sale
before the competent authorities as well as before the civil court. The appeal
preferred before the Joint Registrar, Cooperative Societies, Gwalior, was
dismissed by order dated 04.08.2008. Thereafter, the petitioner and the other
plaintiffs instituted Civil Suit No.1-A/2009 before the Court of Civil Judge,
Class I, Kolaras, District Shivpuri, seeking a declaration that the sale
certificate was illegal and void and praying for permanent injunction. The
said suit was dismissed by judgment and decree dated 15.02.2010. It is,
therefore, contended that the petitioner cannot seek the same substantive
relief in the present writ petition without establishing any independent
ground warranting interference under Article 226 of the Constitution of
India.
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Learned counsel for respondent No.5 also opposes the petition and

supports the auction proceedings and the sale certificate issued in his favour.
It is submitted that the challenge raised by the petitioner concerns disputed
questions of fact relating to the loan transaction, service of notice, conduct of
the auction and the parties' respective rights over the land. Such questions,
according to the respondents, cannot be reopened merely on the basis of the
allegations made in the writ petition, particularly when the petitioner's
challenge to the sale certificate has already been considered in the civil
proceedings.
Learned Government Advocate appearing for the State adopts the
submissions advanced on behalf of the contesting respondents, to the extent
applicable, and prays for dismissal of the petition.
Heard learned counsel for the parties and perused the record.
The principal question which arises for consideration is whether, in the
facts and circumstances of the present case, the petitioner has established any
illegality, jurisdictional error or material procedural irregularity in the
auction proceedings culminating in issuance of the sale certificate dated
02.08.2007, warranting interference by this Court in exercise of its
extraordinary jurisdiction under Article 226 of the Constitution of India.
Before examining the rival contentions, it is appropriate to notice the
statutory framework governing the auction in question. The Madhya Pradesh
Cooperative Agricultural and Rural Development Bank Act, 1999, provides
a mechanism for sale of property charged to the Bank without intervention of
the Court. Section 26 deals with the power to sell charged property, whereas
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Section 28 deals with confirmation of sale. Under Section 28, a person

having a right or interest in the property affected by the sale may seek to
have the sale set aside in accordance with the conditions and procedure
prescribed therein. Upon confirmation in accordance with the statutory
provision, the sale becomes absolute and the property vests in the purchaser
from the time of sale. The statute also prescribes the consequences of the
final order confirming the sale.
In the present case, the documents placed on record indicate that the
disputed land was auctioned on 16.05.2007, the sale was confirmed on
11.07.2007 and the sale certificate was issued on 02.08.2007 in favour of
respondent No.5. The petitioner questions the validity of these proceedings
primarily on the ground that the legal representatives of the deceased
borrower were not duly informed of the outstanding dues and the notice
dated 17.03.2007 was issued in the name of the deceased borrower. The
Bank, however, maintains that the loan remained unpaid and the recovery
proceedings were undertaken in accordance with the applicable statutory
procedure.
The allegation concerning non-service of notice and denial of an
opportunity to repay the loan is undoubtedly relevant to the legality of the
auction proceedings. Nevertheless, the mere assertion of such an allegation
does not, by itself, establish that the proceedings were conducted in violation
of the governing statute. The petitioner was required to demonstrate, on the
basis of the relevant record, the precise procedural requirement that was
violated, the nature of the alleged irregularity and its legal effect upon the
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auction and confirmation of sale. The challenge must be examined in the

light of the applicable statutory provisions and the material available on
record, rather than on the basis of the allegations alone.
In this regard, the judgment and decree dated 15.02.2010 passed in
Civil Suit No.1-A/2009 assume considerable relevance. The record reveals
that the petitioner and the other plaintiffs had instituted the aforesaid suit
seeking substantially similar relief, namely, a declaration that the sale
certificate dated 02.08.2007 was illegal and void and a permanent injunction
in respect of the disputed agricultural land. The challenge in the civil suit was
founded, inter alia, upon the alleged absence of proper notice, the
circumstances in which the auction was conducted and the plaintiffs' claim to
the disputed property.
A perusal of the judgment of the civil court indicates that the Court
framed issues concerning the legality of the sale certificate, the plaintiffs'
claim to ownership and possession, the alleged interference by the auction
purchaser, and the maintainability of the suit in view of the statutory
provisions governing cooperative societies. Upon consideration of the
pleadings and evidence, the civil court recorded findings against the
plaintiffs on their principal claims and held that the suit was not maintainable
before the civil court in view of the statutory bar and the applicable
requirements under the Madhya Pradesh Cooperative Societies Act, 1960.
Consequently, the suit was dismissed by judgment and decree dated
15.02.2010.
The aforesaid judgment is material for two reasons. First, it
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demonstrates that the petitioner's grievance concerning the auction sale and

the sale certificate had already been brought before a competent judicial
forum, where the relief sought was considered in the context of the evidence
and the applicable law. Secondly, the civil court's conclusion regarding the
statutory framework governing the dispute reinforces the need to examine
the petitioner's challenge in accordance with the special legislation applicable
to the Bank and its recovery proceedings.
It is, however, necessary to clarify that the dismissal of the civil suit on
the ground of lack of jurisdiction cannot, by itself, be treated as a conclusive
adjudication on every question concerning the validity of the auction on its
merits. The judgment must be read as a whole, distinguishing the findings
recorded on the individual issues from the conclusion regarding
maintainability. Nevertheless, the petitioner cannot rely upon the dismissal of
the suit as a basis for automatically reopening the same controversy in writ
proceedings. The existence and scope of any further remedy, as well as the
legal effect of the judgment and decree, must be assessed in accordance with
law.
The statutory scheme also assumes significance in view of Section 64
of the Madhya Pradesh Cooperative Societies Act, 1960, which provides for
reference to the Registrar of disputes touching the constitution, management
or business of a cooperative society between the categories of persons
specified therein. The provision expressly includes claims relating to dues
recoverable from a member, past member or the legal representative of a
deceased member. Section 82 further provides for a bar on the jurisdiction of
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civil courts in respect of disputes required to be referred under the Act,

subject to the statutory exceptions.
In the present matter, the dispute arises out of a loan obtained from the
respondent Bank, the alleged mortgage of agricultural land as security for
repayment, and the subsequent recovery proceedings initiated upon non-
payment of the dues. The civil court itself examined the objection concerning
the statutory jurisdiction and dismissed the suit. The petitioner has not
demonstrated, on the material placed before this Court, any sustainable basis
for disregarding the statutory framework or for treating the writ petition as
an appropriate proceeding for a fresh factual determination of all the issues
relating to the loan and auction.
This Court is conscious of the settled principle that the existence of an
alternative remedy does not operate as an absolute bar to the exercise of
jurisdiction under Article 226 of the Constitution of India. Interference may
be warranted, inter alia, where the proceedings are shown to be without
jurisdiction, where the principles of natural justice have been violated, or
where the constitutional validity of the relevant provision is challenged.
Equally, however, the existence of an alternative statutory mechanism is a
relevant consideration, and the writ court ordinarily refrains from
undertaking a detailed factual inquiry where the controversy requires
examination of evidence that is more appropriately considered in the forum
prescribed by law. The principles governing this discretion have been
explained by the Supreme Court in Radha Krishan Industries v. State of
Himachal Pradesh, (2021) 6 SCC 771.
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Applying the aforesaid principles to the facts of the present case, the

petitioner's allegations concerning the service of notice, the knowledge of the
legal representatives, the outstanding amount and the conduct of the auction
would require a careful examination of the original loan documents, the
relevant notices, the records maintained by the Bank and the proceedings
leading to confirmation of sale. The petitioner has not established any patent
illegality apparent from the material placed before this Court that would
justify setting aside the sale certificate in the exercise of writ jurisdiction.
The contention that the notice dated 17.03.2007 was issued in the
name of the deceased borrower also requires examination in the context of
the applicable statutory procedure and the actual record of service. The mere
fact that the borrower had died earlier does not, without examination of the
notice, the relevant proceedings and the legal requirements applicable to
service upon the persons concerned, conclusively establish that the entire
auction proceedings were void. Equally, the respondents' assertion that the
notice was duly issued cannot be accepted as a substitute for proof of
compliance where such compliance is specifically disputed. In the present
case, however, the petitioner has not demonstrated a sufficient legal basis, on
the material placed before this Court, for the relief of outright quashment
sought in the writ petition.
Another relevant circumstance is that the petitioner is seeking to
invalidate a sale which was conducted in May, 2007 and confirmed in July
2007, followed by issuance of the sale certificate in August 2007. The
petitioner's mother had pursued an appeal before the Joint Registrar, which
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was dismissed on 04.08.2008, and a civil suit was thereafter instituted and

decided on 15.02.2010. These proceedings explain the course of litigation
pursued by the petitioner and the other legal representatives. Nevertheless,
the petitioner must still establish an independent and legally sustainable
ground for interference with the auction proceedings in the present writ
petition. The mere fact that earlier proceedings were pursued does not, by
itself, establish that the sale certificate is liable to be quashed.
The Court has also considered the fact that the disputed land is stated
to be the principal source of livelihood of the petitioner and the other legal
representatives. While this circumstance deserves due consideration, it
cannot, by itself, invalidate recovery proceedings undertaken under a
statutory provision. The protection available to a person whose property is
subjected to recovery proceedings must be assessed with reference to the
statutory safeguards governing the sale, the nature of the security created,
compliance with the prescribed procedure and the remedies available in law.
Equally, the Bank is required to establish compliance with the applicable
statutory requirements and cannot claim an unrestricted right to sell the
property merely because a loan remains unpaid.
In the present case, the petitioner's challenge is directed against the
auction proceedings and the sale certificate, while the judgment and decree
dated 15.02.2010 in the civil suit already record the outcome of an earlier
challenge to substantially the same transaction. The petitioner has not
established any sufficient ground for this Court to disregard the relevant
statutory framework, undertake a fresh factual adjudication in writ
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proceedings and set aside the sale certificate dated 02.08.2007. The civil

court's judgment, read in its entirety and without treating its jurisdictional
conclusion as an independent determination of every issue on merits, further
supports the conclusion that the relief sought cannot be granted merely on the
allegations raised in the present petition.
In view of the foregoing discussion, this Court is of the considered
opinion that the petitioner has failed to establish a case warranting
interference under Article 226 of the Constitution of India. The reliefs
seeking quashment of the sale certificate dated 02.08.2007 and the auction
proceedings in respect of the disputed agricultural land are, therefore,
declined.
Accordingly, the writ petition stands dismissed. In the facts and
circumstances of the case, there shall be no order as to costs
(MILIND RAMESH PHADKE)
JUDGE
pwn*

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