Mandatory auction payment deadline breach renders sale void and requires re-auction under cooperative society rules

Non-payment of the balance auction purchase money within the time prescribed under Rule 107(11)(g) of the Maharashtra Co-operative Societies Rules, 1961 was treated as a mandatory breach that vitiated the sale. The requirement to deposit 15% at the auction and the remaining amount within 15 days was held to go to the root of the auction process, so non-compliance was not a mere irregularity but rendered the purported sale a nullity. The legal effect stated is that an auction conducted without such compliance is invalid and the property must be re-auctioned in accordance with the Rules.

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Issues: Whether non-payment of the balance 85% of the auction purchase money within the prescribed time under the Maharashtra Co-operative Societies Rules, 1961 rendered the auction sale void and invalid.

Analysis: Rule 107(11)(g) of the Maharashtra Co-operative Societies Rules, 1961 required the auction purchaser to deposit 15% of the price at the time of purchase and the remaining 85% within 15 days. The prescribed time limit was treated as mandatory, and failure to pay the balance within time was held to vitiate the sale itself. Such non-compliance was not a mere irregularity but went to the root of the auction proceedings, rendering the purported sale a complete nullity.

Conclusion: The auction sale was invalid and there was no valid sale of the appellant's property.

Final Conclusion: The appeals succeeded, the impugned judgment was set aside, and the property was directed to be re-auctioned in accordance with Rule 107 of the Maharashtra Co-operative Societies Rules, 1961.

Ratio Decidendi: Compliance with the mandatory time limit for payment of the full auction purchase money is essential to the validity of the sale, and failure to comply renders the auction a nullity.

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