Suo motu revisional power and auction sale confirmation: limitation failed, and the purchaser got no bona fide third-party protection.

Section 108 of the Karnataka Cooperative Societies Act was treated as conferring a suo motu revisional power on the State Government that could be exercised to correct a miscarriage of justice, so the limitation objection to the Minister's revision was rejected. The Court also held that the auction purchaser could not claim protection as a bona fide third party because the sale was subject to statutory procedure and confirmation, and the confirmation was made after repayment of the principal amount and within a waiver framework. The auction sale confirmation was therefore illegal, the High Court's interference with the Minister's order was unsustainable, and possession was directed to be restored to the appellants.

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Issues: (i) Whether the revision petition before the Minister under Section 108 of the Karnataka Cooperative Societies Act, 1959 was barred by time, and whether the power could be treated as suo motu in the facts of the case; (ii) Whether the auction purchaser was protected as a bona fide third party whose interest should be preserved.

Issue (i): Whether the revision petition before the Minister under Section 108 of the Karnataka Cooperative Societies Act, 1959 was barred by time, and whether the power could be treated as suo motu in the facts of the case.

Analysis: Section 108 confers on the State Government a revisional power exercisable suo motu at any time, and on application by an aggrieved person within six months. The dispute had a long history of repeated proceedings, and the appellants had repaid the principal amount within the period contemplated by the government notification. The earlier authorities had proceeded on technical grounds without examining the claim on merits. In that setting, the exercise of revisional power was treated as a suo motu exercise aimed at preventing miscarriage of justice, and the objection based on limitation was rejected.

Conclusion: The revision was not hit by limitation in the manner urged, and the Minister's exercise of revisional power was valid.

Issue (ii): Whether the auction purchaser was protected as a bona fide third party whose interest should be preserved.

Analysis: The sale process under Section 89 of the Karnataka Cooperative Societies Act, 1959 required notice and observance of the statutory procedure before sale. The award and the sale proceedings were materially affected by the appellants' non-participation and by the later repayment of the principal amount before confirmation of sale. Since the auction was subject to confirmation and the confirmation itself occurred after the repayment and in the face of the government-backed waiver arrangement, the purchaser could not claim the status of a bona fide purchaser whose interest was insulated from challenge.

Conclusion: The auction purchaser's interest was not entitled to protection as that of a bona fide third party.

Final Conclusion: The auction sale confirmation was illegal, the High Court's interference with the Minister's order was unsustainable, and the appellants were entitled to restoration of possession.

Ratio Decidendi: Where a special statute confers suo motu revisional power on the State Government to correct orders resulting in miscarriage of justice, limitation objections cannot defeat a revisional order passed to undo an illegal sale, and a purchaser at a sale subject to confirmation does not acquire an indefeasible bona fide title when the confirmation itself is contrary to the governing statutory and governmental framework.

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