Interim protection against cooperative recovery auctions may be conditioned on depositing part of the quantified liability.

The appellants, who had been co-opted as directors of R.939 Thachankurichi Primary Agricultural Co-operative Society, challenged individual auction sale notices dated 08.06.2026 issued by the Deputy Registrar under Rule 126(2)(e) of the Tamil Nadu Co-operative Societies Rules, 1988.

The notices followed proceedings under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983, which concerned a fact-finding enquiry, and subsequent proceedings under Section 87 of the Act determining liability of approximately ₹1,55,11,538.

The appellants had also instituted Civil Miscellaneous Appeals before the competent Co-operative Tribunal/District Court.

Their writ petitions challenging the auction notices were disposed of by the learned Single Judge subject to each petitioner depositing ₹8,00,000, with the auction notices kept in abeyance pending disposal of the appeals.

Whether the appellants were entitled to interference under Article 226 of the Constitution against the auction sale notices issued under Rule 126(2)(e), when statutory appeals concerning the underlying liability were pending before the Co-operative Tribunal.

Whether the condition requiring each appellant to deposit ₹8,00,000 for protection against recovery and auction was legally justified and warranted interference in writ appeal.

Whether the appellants’ contention that responsibility lay with the person-in-charge of the Secretary’s post could be determined in the writ proceedings.

The Court applied Section 81 of the Tamil Nadu Co-operative Societies Act, 1983, governing a fact-finding enquiry, and Section 87, under which liability proceedings had subsequently been initiated.

It also applied Rule 126(2)(e) of the Tamil Nadu Co-operative Societies Rules, 1988, under which the auction notices were issued.

The Court recognised that factual disputes relating to the individual responsibility of the appellants had to be adjudicated in the statutory appeals before the Co-operative Tribunal and not in writ proceedings.

In exercising appellate review, the Court also considered the proportionality of the deposit condition against the total quantified liability of ₹1,55,11,538.

The Court held that the appellants’ claim that they were poor villagers unaware of the applicable rules, and that the Secretary or person acting in-charge was actually responsible for the alleged loss, raised disputed questions of fact.

Those questions were required to be examined in the pending Civil Miscellaneous Appeals and could not justify interference with the recovery process in the present writ appeals.

Although the appellants contended that their urgent applications before the Tribunal had not been taken up, the Single Judge had already granted substantial interim protection by keeping the auction notices in abeyance upon deposit of ₹8,00,000 by each appellant.

Considering that the total liability exceeded ₹1.55 crore, the Division Bench found the deposit to be comparatively negligible and described the relief granted by the Single Judge as liberal.

It therefore found no reason to modify the impugned order.

The Court upheld the direction requiring each appellant to deposit ₹8,00,000 and the consequential protection that the auction sale notices would remain in abeyance subject to such deposit and the outcome of the statutory appeals.

However, the appellants were granted a further period of eight weeks from the date on which the judgment was uploaded on the Court’s website to make the deposit.

In default, the protection would stand vacated and the respondents could proceed with recovery, including auction, in accordance with law.

No costs were awarded, and the connected miscellaneous petitions were closed.