Belated challenges to confirmed auction sales fail absent timely objections and specific proof of fraud.

The appellants had obtained two loans from Kizhathadiyoor Service Co-operative Bank in 2013.

The Bank initiated arbitration proceedings under Section 69 of the Kerala Co-operative Societies Act, 1969, resulting in awards dated 19 November 2014 directing recovery of approximately ₹20,01,029 and ₹21,77,298, respectively, with interest and costs.

The appellants challenged the awards after nearly ten years, contending that they had not received summons; the Co-operative Tribunal declined to entertain the revisions due to inordinate delay.

The Bank subsequently conducted an auction of the appellants’ properties on 30 January 2024.

The eighth respondent, Anish M.J., became the highest bidder for ₹75,00,000 after the bidding commenced at the total dues of ₹94,20,723 and was thereafter conducted with reference to the fair value obtained from the Village Office.

The sale was confirmed on 30 August 2025.

The appellants’ earlier writ petitions challenging the awards were dismissed on 6 August 2025, and their review petitions were also dismissed.

Their subsequent statutory appeal under Section 83(1)(j) of the Act against confirmation of the sale was dismissed on 9 February 2026.

The present writ petition, challenging the auction sale and its confirmation on grounds of material irregularity and fraud, was dismissed by the learned Single Judge. The appellants filed the present intra-court appeal.

1. Whether the appellants established sufficient grounds, including material irregularity or fraud, to set aside the auction sale?

2. Whether there existed any justifiable ground to interfere with the judgment of the learned Single Judge under Article 226 of the Constitution?

The Court applied Rules 74 and 81 of the Kerala Co-operative Societies Rules, 1969, which govern execution of arbitration awards and prescribe the requirements for demand notice, sale proclamation, publication, notice to the defaulter, and disclosure of material particulars concerning the property and sale.

Rule 82 permits setting aside of a sale upon the prescribed deposit, while Rule 83 requires an application alleging irregularity or fraud to be filed within thirty days of the sale.

The Court also applied the principle analogous to Order XXI Rule 90(3) of the Code of Civil Procedure, under which grounds that could and should have been raised before or at the time of drawing up the sale proclamation cannot ordinarily be raised later.

It relied on Jagan Singh & Co. v. Ludhiana Improvement Trust, (2024) 3 SCC 308, concerning the effect of a judgment-debtor’s failure to object during execution and the distinction between fraud and a later claim that the property fetched an inadequate price.

It relied on Sadashiv Prasad Singh v. Harendar Singh, (2015) 5 SCC 574, protecting a bona fide third-party auction purchaser.

It relied on Sanjay Sharma v. Kotak Mahindra Bank Ltd., 2025 KHC OnLine 7019, holding that a confirmed public auction should not be disturbed for a mere procedural deviation absent a fundamental defect.

It relied on Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280, requiring precise and specific pleadings of fraud, with general allegations being insufficient.

The Court further recognised that fraud may invalidate an order obtained from a court or authority, but held that fraud must be specifically pleaded and established.

The appellants did not object to the sale proclamation, the valuation, the reserve price, the conduct of the auction, or the sale before its confirmation.

They also failed to file an application under Rules 82 or 83 within the prescribed period; instead, their statutory appeal was filed only on 28 October 2025, long after the auction on 30 January 2024.

Their earlier writ petitions, filed after the auction, did not challenge the sale proceedings, and the Court treated this conduct as deliberate and unexplained delay.

The auction diary indicated that the fair value had been obtained from the Village Office and that the property was sold to the highest bidder for ₹75,00,000 after bidding at the amount of the dues did not attract a bidder.

Mere inadequacy of price or the fact that the property might have been worth more did not establish fraud or material irregularity, particularly where the appellants had remained inactive at every relevant stage.

Further, the allegations of fraud lacked the precise particulars required by law and were unsupported by specific pleadings or evidence.

The eighth respondent, being a bona fide third-party auction purchaser, was entitled to greater protection than a decree-holder purchaser.

It held that they had failed to establish any material irregularity, fraud, or other fundamental defect warranting interference with the auction sale, and that their delayed challenge was barred by their failure to object during the execution proceedings or to invoke Rules 82 or 83 within time.

The appeal was accordingly dismissed, and the judgment of the learned Single Judge was affirmed.

No order was made as to costs.