Writ Courts Do Not Encourage Pleas From Indolent, Tardy & Lethargic Litigants: Supreme Court
The Supreme Court observed that a writ court does not encourage petitions from indolent, tardy and lethargic litigants.
While upholding the auction sale to the Agricultural Produce Market Committee (Committee), the Court stated that outstanding dues were recoverable from the Mula Sahakari Soot Girni Ltd. (a cooperative society) and invoked its powers under Article 142 of the Constitution to do complete justice between the parties.
A Bench of Justice Dipankar Datta and Justice Prashant Kumar Mishra observed, “Law is well-settled that a writ court does not encourage petitions from indolent, tardy and lethargic litigants; the writ court comes to the aid of a litigant who approaches it with promptitude and before accrual of third-party rights. Not having approached the High Court before accrual of a right in favour of the respondent no.6, we hold that on facts and in the circumstances, it was not open to the appellant to question the auction sale process in question after finalisation of the sale in favour of the respondent no.6.”
Senior Advocate Vijay Hansaria represented the appellant, while Advocate Shrirang B. Varma appeared for the respondents.
The Ahmednagar District Central Cooperative Bank Ltd. (the appellant bank) had sanctioned a cash credit loan of ₹95 lakh to the cooperative society. Following the society’s default, the bank lodged a dispute for recovery, which was allowed by the Registrar of Cooperative Societies. In liquidation proceedings initiated, the property of the society was put up for auction. The appellant contended that the property was undervalued in auctions, while the original valuation in 2012 stood at Rs. 4.10 crore. The eventual auction sale took place in 2016, with the property sold to the Committee for Rs. 2.51 crore.
The appellant bank submitted that despite being aware of the upset price and observing the auction process unfold, they were unable to act in time as they were gathering information. The bank only challenged the auction later, questioning the drastic reduction in the property's valuation, as well as the absence of adequate bidders and public notices for auction postponements.
The Supreme Court stated that the appellant was sitting on the fence and watching which direction the auction process proceeds. “Much before the auction took place, the appellant was fairly and squarely aware of the upset price for the auction sale,” the Court remarked.
The Court stated, “The explanation that the appellant was busy in obtaining information after the auction sale was conducted for launching an attack on the process of sale could be correct on facts but by that, precious time was lost.”
Consequently, the Court noted that “merely because the respondent no.6 is a creature of a statute, that would not clothe it with any immunity and to have a property transferred to it at a throw away price.” Therefore, the Bench stated that since the dues recoverable from the society ran in crores of rupees, the interest of the appellant bank could not be brushed aside.
Accordingly, the Supreme Court disposed of the appeal.
Cause Title: The Ahmednagar District Central Cooperative Bank Ltd. v. The State Of Maharashtra & Ors. (Neutral Citation: 2024 INSC 741)
Appearance:
Appellant: Senior Advocate Vijay Hansaria; AOR M.Y. Deshmukh; Advocates Manjeet Kirpal, Adviteeya Sharma and Kavya Jhawar
Respondents: Advocates Shrirang B. Varma, Siddharth Dharmadhikari, Bharat Bagla, Sourav Singh, Aditya Krishna, Preet S. Phanse, Adarsh Dubey, Abhay Ostwal, Nishant Sharma and Patil Avi Vilas; AOR Aaditya Aniruddha Pande and Sandeep Sudhakar Deshmukh
